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    Operating and cash conversion cycles

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    Consider the attached financial statement information for the Zamboni Icers Corporation.
    Item Beginning Ending
    Inventory $8,257.00 $10,432.00
    Accts Receivable $5,275.00 $5,963.00
    Accts Payable $7,685.00 $7,900.00
    Net Sales $65,327.00
    Cost of goods sold $51,284.00

    Calculate the operating and cash cycles. How do you interpret your answer?

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    https://brainmass.com/business/management-accounting/operating-cash-conversion-cycles-3731

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    The solution is in the attached excel sheet where formatting is maintained.

    Item Beginning Ending
    Inventory $8,257.00 $10,432.00
    Accts Receivable $5,275.00 $5,963.00
    Accts Payable $7,685.00 $7,900.00
    Net Sales $65,327.00
    Cost of goods sold $51,284.00

    Assume 365 days year
    Average inventory=(Beginning + Ending)/2= $9,344.50
    ...

    Solution Summary

    Operating and cash conversion cycles are calculated for the data provided for Zamboni Icers Corporation.

    $2.19

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