Determine the average investment in accounts receivable

Reference no: EM13260422

Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept on hand for an average of 15 days before they are sold. Accounts receivable are outstanding an average of 35 days, and the firm receives 40 days of credit on its purchases from suppliers. A. Estimate the average length of the firm's short term operating cycle. How often would the cycle turn over in a year? B. Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average investment in accounts receivable, inventories, and accounts payable. What would be the net financing need considering only these 3 accounts?

Reference no: EM13260422

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