Calculate the? firms cash conversion cycle

Assignment Help Financial Management

Reference no: EM131902252

Cash conversion cycle

American Products is concerned about managing cash efficiently. On the? average, inventories have an age of 85 ?days, and accounts receivable are collected in 54 days. Accounts payable are paid approximately 33 days after they arise. The firm has annual sales of about ?$40 million. Cost of goods sold are ?$22 ?million, and purchases are ?$16 million.

a. Calculate the? firm's operating cycle.

b. Calculate the? firm's cash conversion cycle.

c. Calculate the amount of resources needed to support the? firm's cash conversion cycle.

d. Discuss how management might be able to reduce the cash conversion cycle.

Round all answers two decimal places

Reference no: EM131902252

Questions Cloud

Accounts receivable changes without bad debts : Calculate the additional profit contribution from new sales that the firm will realize if it makes the proposed change.

Different models to predict the financial failure : Demonstrate familiarity with the causes and effects of financial failure and different models to predict the financial failure.?

Trent wants to form portfolio of four different stocks : Trent wants to form a portfolio of four different stocks. Summary data on the four stocks appears below.

Determine the average level of inventory : Calculate the EOQ. Determine the average level of inventory. ?Determine the reorder point.

Calculate the? firms cash conversion cycle : Calculate the? firm's operating cycle. Calculate the? firm's cash conversion cycle. Discuss how management might be able to reduce the cash conversion cycle.

Decision to commence the testing for project is dependent : Utilizing a decision tree, the NPV used to make the decision to commence the testing for a project is dependent on:

What should be value of the put : if the effective annual risk-free rate of interest is 4% and there are three months until expiration, what should be the value of the put?

Difference between expected values of each tire as EUAW : Which tire should you buy, and what is the difference between the expected values of each tire as an EUAW?

Rideem-up cowboy meat processing : Ride-em-Up Cowboy Meat Processing, Inc. is considering an upgrade to their facilities What is the value of the project with leverage?

User Account

All Pages