Calculate the new cash convergence cycle

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Company x has 15 million of sales, 2 million of inventories, 3 million of recievables, and 1 million of payables. its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 8% rate. what is the company's cash convergence cycle? if company x could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting sales or cost of goods sold, what would the new CCC be, how much cash would be freed up, and how would that affect pre-tax profits?

Reference no: EM1354063

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