Solution-Firm short-term operating cycle

Firm short-term operating cycle

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Reference no: EM131083673

Pretty Lady Cosmetics 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 they 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 three accounts?

Reference no: EM131083673

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Firm short-term operating cycle

Reference no: EM131083673

Reference no: EM131083673

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