Average length of the firm short-term operating cycle

Assignment Help Financial Management

Reference no: EM131987625

Pretty Lady Cosmetic Products have an average production process time of 40 days. Finished goods are kept on hand for an average of 15 days before they are sold. Accounts receivable are outstanding an average of 35 days, and the firm receives 40 days of credit on its purchases from suppliers.

a. Estimate the average length of the firm’s short-term operating cycle. How often would the cycle turn over in a year?

b. Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average investment in accounts receivable, inventories, and accounts payable. What would be the net financing need considering only these three accounts?

Include steps

Reference no: EM131987625

Questions Cloud

Compute the annual inflation rate : Compute the annual inflation rate, LaTeX: f f as a percentage for the entire 20-year period.

Analyze your schedule and network diagram : Analyze your Schedule and Network Diagram. Activities on the Critical Path are outlined in red, while noncritical path activities are outlined in blue.

Describe yourself in entrepreneurial terms : Describe yourself in entrepreneurial terms using the ideas that are discussed in your reading. Use the following attributes from below

Supplier is offering your firm cash discount : A supplier is offering your firm a cash discount of 2 percent if purchases are paid for within ten days; otherwise, the bill is due at the end of 60 days.

Average length of the firm short-term operating cycle : Estimate the average length of the firm’s short-term operating cycle. How often would the cycle turn over in a year?

Determine original cost and accumulated depreciation : For the equipment that was sold, determine its original cost, its accumulated depreciation, and the cash received from the sale

Textbook reading assignments for the week : For the Forums discussion this week: after reading the textbook reading assignments for the week, how would you define employee compensation & benefits?

Research and profile an entrepreneur who has inspired you : Research and profile an entrepreneur who has inspired you in some way. This entrepreneur does not necessarily need to be famous.

Discharged from vegetable packing plant : Pollution control equipment must be purchased to remove the suspended organic material from liquid being discharged from a vegetable packing plant.

User Account

All Pages