Calculations for Cash Conversion Cycle
Not what you're looking for?
Cash Conversion Cycle
This assignment contains two parts: Part I and Part II.
Answer these questions in Word and show your work:
Part I
Assume that a company has $20 million in revenue and its cost of goods sold is 70% of its sales. Additionally, the firm has $3 million of inventories, $2 million in payables, and $2 million in receivables. What's the firm's cash conversion cycle (CCC)? What does this indicate? Do you think that the company should improve its CCC? If so, what are some ways that it can do that? If not, why do you think that's the case?
Part II
Assume that a firm has a payables deferral period of 40 days, an inventory conversion period of 62 days, and an average collection period of 29 days.
What's the firm's cash conversion cycle?
Assume that all of the firm's sales are on credit. If the firm has annual sales of $4 million, what's the accounts receivable investment?
How many times a year will the firm turn over its inventory?
Purchase this Solution
Solution Summary
The solution has detailed step by step calculations for questions involving cash conversion cycles.
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.