Your consulting firm was recentlyhired to improve the performance ofRP Inc, which is highly profitable buthas been experiencing cashshortages due to its high growthrate. As one part of your analysis.you want to determine the firm'scash conversion cycle. Using thefollowing information and a 365-dayyear, what is the firm's present cashconversion cycle?Average inventoryAnnual salesAnnual cost of goods seldAverage accounts receivableAverage accunts payableP5.000P00.000PH0,000P0,000F5000140.6 days120.6 days133.6 days148.0 daysO 126.9 days

Receivable Days: Receivable Days Average Accounts Receivable / Sales = Receivable Days…

Answered: Your consulting firm was recently hired…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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en experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year,(b) what is your Net Working Capital • Current inventory = $ 180,000.00 • Annual sales = $ 700,000.00 • Accounts receivable = $ 165,000.00 • Accounts payable = $ 85,000.00 • Total annual purchases = $ 567,000.00 • Purchases credit terms: net 30 days. • Receivables credit terms: net 50 days

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