Increasing Operating Cycle & Decreasing Cash Cycle

Related BrainMass Solutions

• P13-1 Cash Conversion Cycle and Operating Cycle for American Products

  Increasing the payable days This solution provides calculations for the firm's operating cycle, cash conversion cycle, and resources needed. It also provides two recommendations for reducing the cash conversion cycle.

• Cash conversion cycle; amount resources; effective rates

  ¤ Decrease the accounts receivables period - This could be achieved through decreasing the credits sales and increasing the cash sales, decreasing the credit period offered to the customers, increasing the cash discount to encourage customers to pay

• Multiple Choice Questions on Working Capital

  c. increasing the operating cycle e. decreasing the accounts receivable turnover rate d. decreasing the accounts payable period b. increasing the inventory turnover rate a. increasing the credit period granted to a customer

• Operating Cycle, Working Capital, Market Efficiency

  decreasing the payables turnover from 7 times to 6 times increasing the days sales in receivables decreasing the inventory turnover rate increasing the average receivables balance decreasing the credit repayment

• Cash conversion cycle

  Calculate the firm's operating cycle. Operating Cycle (OC) = Inventory Conversion Period + Receivables Conversion Period =90+60 =150 days = Answer b. Calculate the firm's cash conversion cycle.

• Long Term Assets and Security Stocks

  b. assets that either are cash or are expected to become cash within one year or one operating cycle. c. securities such as stock and bonds that are held for more than one year or one operating cycle.

• Finance questions

  A negative cash conversion cycle (CCC) means the average payment period (APP) exceeds the operating cycle (OC). 7.

• Importance of the operating cycle

  Operating Cycle is defined as the time duration, which the firm requires to manufacture and sell the product and collect cash.

• Determining an optimum amount of working capital

  Cash is used to start and finish the operating cycle within a business. Excess cash is a wasted asset because it is not working to increase profits (other than investment earnings).