Cash conversion cycle of daniels corporation

Assignment Help Managerial Accounting

Reference no: EM1349234

Cash concersion cycle

Daniels Corporation has $15 million of sales, $2 million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 80 percent of sales, and it finances working capital with bank loans at 8% rate. What is Daniel's Corp cash conversion cycle? If Daniels Corp could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting either sales or cost of goods sold, what would the new cash conversion cycle be, how much cash would be freed up, and how would that affect pre-tax profits? Show your work.

AFN equation

Jamson Corporation's sales are expected to increase from $5 million in 2005 to $6 million in 2006, or by 20%. Its assets totaled $3 million at the end of 2005. Jamson is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2005, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. The after-tax profit margin is forecasted to be 5%, and the forecasted retention ration is 30%. Use the AFN equation to forecast Jamson's additional funds needed for the coming year. Show your work.

Reference no: EM1349234

Questions Cloud

Advertising and target marketing : Think about some recent advertisements you have seen on television or in magazines. Can you think of examples of ads that targeted different kinds of attitudes?

Describe about change management : how can we convey the importance and significance of change and avoid resistance as we attempt to do so

Advantages and disadvantages of implementing dfs : Explain advantages and disadvantages of implementing a DFS for this size of company, along with a recommendation for or against, and why.

Describe perfect competition and long-run equilibrium : Describe perfect competition and long-run equilibrium. Provide detailed descriptions, definitions and concrete examples of your findings.

Cash conversion cycle of daniels corporation : Daniels Corporation has $15 million of sales, $2 million of inventories, $3 million of receivables, and $1 million of payables.

Definition of belief perseverance : Also, what is a good definition of "belief perseverance" and how it interferes with critical thinking?

Explain organizational change and development : Organizational Change and Development - Paper on organizational development - plan of action based on the OD approach including: Scientific management, Ideal bureaucracy and Administrative management.

Explain fred is liable because he was put on notice : Explain Fred is liable because he was put on notice of the presence of the substance. Ginger is not liable because she did not have actual knowledge.

What will be the new period of the system : A 23 bullet traveling 240 penetrates a 4 block of wood and emerges going 170. If the block is stationary on a frictionless surface when hit, how fast does it move after the bullet emerges.

User Account

All Pages