Sales outstanding on its cash conversion cycle

Assignment Help Financial Management

Reference no: EM131601791

Cash conversion cycle

Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2016 sales (all on credit) were $264,000; its cost of goods sold is 80% of sales; and it earned a net profit of 6%, or $15,840. It turned over its inventory 7 times during the year, and its DSO was 40 days. The firm had fixed assets totaling $41,000. Chastain's payables deferral period is 35 days. Assume 365 days in year for your calculations.

Calculate Chastain's cash conversion cycle. Round your answer to two decimal places. Do not round intermediate calculations.

days

Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Round your answers to two decimal places. Do not round intermediate calculations.

Total assets turnover

ROA % Suppose Chastain's managers believe that the inventory turnover can be raised to 8.5 times. What would Chastain's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8.5 for 2016? Round your answers to two decimal places. Do not round intermediate calculations.

Cash conversion cycle days

Total assets turnover

ROA %

Reference no: EM131601791

Questions Cloud

Discuss job satisfaction and organizational commitment : Compare the difference between job satisfaction and organizational commitment. Determine which is more strongly related to performance for your selected company

What other brick-mortar retailer might be likely competitor : what other brick and mortar retailer might be a likely competitor?

What are your thoughts about impact of cash flow forecasting : What are your thoughts about impact of cash flow forecasting in hospitals based on utilization, physician competition, technology and cost of providing care.

Discuss family and medical leave act : Develop a PowerPoint presentation It should include a title slide, an agenda slide, body content slides, a closing slide

Sales outstanding on its cash conversion cycle : Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle.

Analyze competitive forces across dynamic environments : Analyze competitive forces across dynamic and mature environments. Assess external growth strategy and trend in strategic management in competitive environment.

Write a function that prints the frequency : FIT1008 - Intro to Computer Science - Write a function that prints the frequency of each temperature in the list between two given temperatures

What is standard deviation of the return on our portfolio : In comparison, the return on Company B's stock in the coming year could be - 5%, - 1%, 4%, or 12%. The corresponding probabilities are 10%, 30%, 20%.

A quick overview of the agile approach : A quick overview of the Agile approach is to include several iterations providing some of the expected features until the product is complete.

User Account

All Pages