Firm operating cycle-firm cash conversion cycle

Reference no: EM13148857

American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365-day year.

Calculate the firm's operating cycle.
Calculate the firm's cash conversion cycle.
Calculate the amount of resources needed to support the firm's cash conversion cycle.
Discuss how management might be able to reduce the cash conversion cycle.

Reference no: EM13148857

Questions Cloud

Find the concentration of ammonia in the solution : A solution is prepared by dissolving 0.16 mol of acetic acid and 0.16 mol of ammonium chloride in enough water to make 1.0 { L} of solution. Find the concentration of ammonia in the solution.

How will an increase in the savings rate affect the growth : How will an increase in the savings rate affect the growth rate of per capita output in an endogenous growth model?

What would the cardia output be of a patient : What would the cardia output be of a patient with a blood pressure of 120/75, a pulse rate of 40 beats/minute, a stroke volume of 70mL/beat, and a respiratory rate of 25 breaths a minute?

Explain are snow and cold weather independent events : On a December day, the probability of snow is .30. The probability of a "cold" day is .50. The probability of snow and "cold" weather is .15. Are snow and "cold" weather independent events?

Firm operating cycle-firm cash conversion cycle : Calculate the firm's operating cycle. Calculate the firm's cash conversion cycle. Calculate the amount of resources needed to support the firm's cash conversion cycle. Discuss how management might be able to reduce the cash conversion cycle.

Describe an amino acid that is nonessential : To maintain adequate nutrition, animals require dietary access to certain amino acids. How would you describe an amino acid that is "nonessential"? Provide an example of a nonessential amino acid.

What type of reaction occurs prior to the substitution : What type of reaction occurs prior to the substitution reaction to form a new good leaving group? And please explain why? a. nothing b. an acid base reaction

What is the molar mass of a gas : What is the molar mass of a gas if 0.250 g of the gas occupies 215 mL at 618 mmHg and 30.0°C?

Find mean nicotine content of brand of cigarettes is greater : To determine whether the mean nicotine content of a brand of cigarettes is greater than the advertised value of 1.4 milligrams, a health advocacy group tests.

User Account

All Pages