Question

**Problem 16-11**

Cash Conversion Cycle

Negus Enterprises has an inventory conversion period of 62 days, an average collection period of 35 days, and a payables deferral period of 36 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations.

- What is the length of the firm's cash conversion cycle?

days - If Negus's annual sales are $3,705,000 and all sales are on
credit, what is the firm's investment in accounts receivable? Round
your answer to the nearest dollar.

$ - How many times per year does Negus Enterprises turn over its
inventory? Round your answer to two decimal places.

Answer #1

a)

Cash conversion cycle = Inventory period + Average collection period - payables deferral period

Cash conversion cycle = 62 + 35 - 36

**Cash conversion cycle = 61 days**

b)

Days on receivables = 365 / Receivables turnover

35 = 365 / Receivables turnover

Receivables turnover = 10.42857

Receivables turnover = Credit sales / Accounts receivables

10.42857 = 3,705,000 / Accounts receivables

**Accounts receivables = 355,274**

c)

Days of inventory = 365 / inventory turnover

62 = 365 / inventory turnover

inventory turnover = 5.89

**It will turn over 5.89 times**

Negus Enterprises has an inventory conversion period of 62 days,
an average collection period of 35 days, and a payables deferral
period of 36 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations.
What is the length of the firm's cash conversion cycle?
days
If Negus' annual sales are $3,705,000 and all sales are on
credit, what is the firm's investment in accounts receivable? Round
your answer to the nearest...

Problem 16-11
Cash Conversion Cycle
Negus Enterprises has an inventory conversion period of 72 days,
an average collection period of 50 days, and a payables deferral
period of 29 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations.
What is the length of the firm's cash conversion cycle?
days
If Negus's annual sales are $3,757,625 and all sales are on
credit, what is the firm's investment in accounts receivable? Round...

Negus Enterprises has an inventory conversion period of 62 days,
an average collection period of 45 days, and a payables deferral
period of 20 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations. What is the length
of the firm's cash conversion cycle? days
If Negus's annual sales are $3,824,775 and all sales are on
credit, what is the firm's investment in accounts receivable? Round
your answer to the nearest...

Cash Conversion Cycle
Negus Enterprises has an inventory conversion period of 60 days,
an average collection period of 48 days, and a payables deferral
period of 27 days. Assume that cost of goods sold is 80% of sales.
Assume a 365-day year. Do not round intermediate calculations.
What is the length of the firm's cash conversion cycle? Round
your answer to the nearest whole number.
___days
If annual sales are $4,124,500 and all sales are on credit, what
is the...

Negus Enterprises has an inventory conversion period of 72 days,
an average collection period of 46 days, and a payables deferral
period of 25 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations.
A) What is the length of the firm's cash conversion cycle?
B) If Negus's annual sales are $3,523,450 and all sales are on
credit, what is the firm's investment in accounts receivable? Round
your answer to the...

Space Enterprises has an inventory conversion period of 55 days,
an average collection period of 44 days, and a payables deferral
period of 29 days. Assume that cost of goods sold is 80% of sales.
Assume 365 days in year for your calculations. What is the length
of the firm's cash conversion cycle? 62 days If Space's annual
sales are $3,432,450 and all sales are on credit, what is the
firm's investment in accounts receivable? Round your answer to the...

Nexus Enterprises has an inventory conversion period
of 50 days, an average collection period of 35 days and a payables
deferral period of 25 days. assume that cost of goods sold is 80%
of sales.
1 what is the length of the firms cash conversion
cycle?
2 if annual sales are 4380000 dollars and all sales
are on credit what is the firm's investment in accounts
receivable?
3 how many times per year does negus Enterprises turn
over its inventory?

Zane Corporation has an inventory conversion period of 86 days,
an average collection period of 33 days, and a payables deferral
period of 38 days. Assume 365 days in year for your
calculations.
Length of the cash conversion cycle = 81 days
Zane's annual sales are $3,457,635 and all sales are on
credit.
The investment in accounts receivable is $312,608.09
How many times per year does Zane turn over its
inventory? Assume that the cost of goods sold is 75%...

Increased Efficiency, Inc. is looking for ways to shorten its
cash conversion cycle. It has annual sales of $36,500,000, or
$100,000 a day on a 365-day basis. The firm's cost of goods sold is
70% of sales. On average, the company has $9,000,000 in inventory
and $8,000,000 in accounts receivable. Its CFO has proposed new
policies that would result in a 20% reduction in both average
inventories and accounts receivable. She also anticipates that
these policies would reduce sales by...

Increased Efficiency, Inc. is looking for ways to shorten its
cash conversion cycle. It has annual sales of $36,500,000, or
$100,000 a day on a 365-day basis. The firm's cost of goods sold is
75% of sales. On average, the company has $9,000,000 in inventory
and $8,000,000 in accounts receivable. Its CFO has proposed new
policies that would result in a 20% reduction in both average
inventories and accounts receivable. She also anticipates that
these policies would reduce sales by...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 12 minutes ago

asked 17 minutes ago

asked 29 minutes ago

asked 29 minutes ago

asked 36 minutes ago

asked 37 minutes ago

asked 39 minutes ago

asked 51 minutes ago

asked 55 minutes ago

asked 56 minutes ago

asked 1 hour ago

asked 1 hour ago