Estimate average length of firm short-term operating cycle

Assignment Help Finance Basics

Reference no: EM13288354

Pretty Lady Cosmetic Products has an average production process time of forty days. Finished goods are kept on hand for an average of fifteen days before they are sold. Accounts receivable are outstanding an average of thirty-five days, and the firm receives forty 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 needs considering only these three accounts?

Reference no: EM13288354

Questions Cloud

Define why is it important to the place the thermometer bulb : Why is it important to the place the thermometer bulb at in the lower part of the Hickman still head? What will happen if you place it either a)too low

Better job of allowing computers to network : You wrote a piece of software that does a better job of allowing computers to network than any other program designed for this purpose.

Determine the output response of an lti system : An LTI system has an impulse response h(t) = e^(t) u(-t),where u(t) is the unit step signal. (a) Give a differential equation description for the system. (b)Suppose that an input signal is given as x(t) = e^(-t) u(t). Determine the output response.

Discuss the agency problem and potential solutions : Why, then should Company X's management care about the price you get for your shares? Discuss the agency problem and potential solutions for the problem.

Estimate average length of firm short-term operating cycle : Estimate the average length of the firm's short-term operating cycle. How often would the cycle turn over in a year?

Define the role of a spin vane or boiling stones : Explain the role of a spin vane or boiling stones that are added to a liquid that is to be heated or distilled

Calculate how much work is done on the capacitor : A large parallel plate capacitor has plate separation of 0.85 cm and plate area of 391 cm2. How much work is done on the capacitor as the plate separation is increased to 1.70 cm

What is the bonds nominal yield to call : Walker Industries has a bond outstanding with 12 years to maturity, a 9% coupon paid semiannually, and a $1,000 par value. The bond has a 7% nominal yield to maturity, but it can be called in 3 years at a price of $1,045. What is the bond's nomina..

Explain what concentration of sodium chloride in water : What concentration of sodium chloride in water is needed to produce an aqueous solution isotonic with blood (blood, pi=7.70 atm at 25 degree C)

User Account

All Pages