Cash conversion cycle
Not what you're looking for?
Acme Corp is a company in Florida. Management is concerned because as their sales have grown, their cash flow has shrunk. Management doesn't understand how this could happen and has approached your team to find a solution for this dilemma.
Part I
Calculate the following: (from attached excel doc)
1. Inventory conversion period
2. Payables deferral period
3. Receivables conversion period
4. Operating cycle
5. Cash conversion cycle (cash gap)
If the company's cost of funds is 8%, what is the annual cost of financing the cash gap?
Part II
Explain to Acme management how rising sales could cause a decrease in the company's cash position and provide three specific recommendations to management on ways to reduce the cash gap.
Purchase this Solution
Solution Summary
This helps in computing cash conversion cycle
Solution Preview
Acme Corp is a company in Florida. Management is concerned because as their sales have grown, their cash flow has shrunk. Management doesn't understand how this could happen and has approached ...
Purchase this Solution
Free BrainMass Quizzes
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.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.