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Cash conversion cycle: American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts recievable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Cost of goods sold are $20 million, and purchases are $15 million.
A) Calculate the firms’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.
Financial statements of a large corporation prepared using US GAAP and IFRS may have some difference but the P/E ratio will be same under GAAP and IFRS. Financial Analysis of a company should be conducted within its global industry rather than other ..
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Identify the best measure of risk for a stock held in a diversified portfolio?
Hector deposits $250,000 into an account earning 3.85% simple interest annually. Find the maturation (future) value of the account after 8 ½ years.
Bond A has a 5% annual coupon, matures in 3 years and has a $1,000 face value. Bond B has a 6% annual coupon, matures in 3 years and has a $1,000 face value. Calculate the price of each of the three bonds and indicate whether each bond is trading at ..
It is well known that Investors generally do not like to bear risk. For two otherwise identical corporate bonds, the one with more idiosyncratic risk should have a price that is lower or the same?
Finance Corp has fixed costs of $7 million and profits of $4 million. What is its degree of operating leverage (DOL)?
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