Calculate the firm cash conversion cycle

Assignment Help Accounting Basics
Reference no: EM131701338

Case Scenario: WORKING CAPITAL AND CURRENT ASSETS MANAGEMENT

Problem I: ABC Manufacturing has an average inventory age of 80 days, an average collection period of 70 days and an average payment period of 60 days.

a) Calculate the firm's cash conversion cycle

b) Calculate the firm's cash turnover, or frequency of its cash conversion cycle in a year (assuming a 365-day year)

c) Should the firm try to minimise or maximise the cash conversion cycle and cash turnover? Why?

Problem II: Leopard Corporation purchases 600,000 units per year of one component. The fixed cost per order is $12.5. The annual carrying cost of the item is 27% of its $1cost.

Determine the EOQ if:

a) No changes

b) Order cost of zero

c) Carrying cost of zero

What do your answers illustrate about the EOQ model? Explain.

Reference no: EM131701338

Questions Cloud

Performance through the use of value chain analysis : How do organizations attempt to improve their performance through the use of value chain analysis?
Process of perception is selecting and interpretation : The process of Perception is (1)Sensing (Exposure), (2)Selecting (Attention) and (3)Interpretation.
Structural components of the body : While reading, pay special attention to the levels of structural organization and the structural components of the body.
Which society would be favored by the utilitarians : Which society would be favored by the Utilitarians? What would Robert Nozick say about moving from society E to society C?
Calculate the firm cash conversion cycle : ABC Manufacturing has an average inventory age of 80 days, an average collection period of 70 days and an average payment period of 60 days.
What is the process of developing antibodies : What is the process of developing antibodies when injected with antibodies from a bacteria or antitoxin?
Discuss how industry forces are influencing profitability : discuss how industry forces are influencing the profitability of the U.S. casino industry,
Describe ways in which ms excel can be used by a manager : Describe ways in which MS Excel can be used by a manager of an organization as a tool for interpreting data.
Anatomy and physiology exam : On her first anatomy and physiology exam, Heather defined homeostasis as "the condition in which the body approaches room temperature and stays there

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd