CONTEMP.FINANCIAL MGMT. (LL)-W/MINDTAP
14th Edition
ISBN: 9780357292877
Author: MOYER
Publisher: CENGAGE L
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Question
Chapter 16, Problem 12P
a)
Summary Introduction
To determine: The length of cash conversion cycle of company B.
a)
Expert Solution
Explanation of Solution
Calculation of inventory conversion period:
Therefore, inventory conversion period is 67.4 days.
Calculation of receivables conversion period:
Therefore, receivables conversion period is 30.4 days.
Calculation of length of operating cycle:
Therefore, operating cycle is 97.8 days
Calculation of payables deferral period:
Therefore, payables deferral period is 51.1 days.
Calculation of length of cash conversion cycle:
Therefore, cash conversion cycle is 46.7 days
b)
Summary Introduction
To determine: Length of the cash conversion cycle.
b)
Expert Solution
Explanation of Solution
Calculation of receivables conversion period:
Therefore, receivables conversion period is 40.6 days.
Calculation of length of operating cycle:
Therefore, operating cycle is 108 days
Calculation of length of cash conversion cycle:
Therefore, cash conversion cycle is 56.9 days
c)
Summary Introduction
To determine: Length of the cash conversion cycle.
c)
Expert Solution
Explanation of Solution
Calculation of receivables conversion period:
Therefore, receivables conversion period is 60.9 days.
Calculation of length of operating cycle:
Therefore, operating cycle is 128.3 days
Calculation of length of cash conversion cycle:
Therefore, cash conversion cycle is 77.2 days
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Students have asked these similar questions
A) i. The following data were extracted from the financial statements of Zinc Incorporated. Assuming the year has 365 days,
calculate the operating cycle and cash conversion cycle of Zinc Inc.
Annual credit sales -
$70,000
Annual cost of goods sold =
$42,500
Inventory =
$7,500
Accounts receivable =
$4,800
Accounts payable=
$4,000
II). Discuss three important ways in which the CCC could be reduced.
Last year, MBA companies had account receivable turnover of 15, total asset turnover of 4.5, and total assets of $1,000,000.
What was the value of net sales?
And the value of MBA’s account receivable?
ces
Given the following information, complete the balance sheet shown next.
Collection period
Days' sales in cash
Current ratio
Inventory turnover
Liabilities to assets
Payables period
Assets
Current assets:
Cash
Accounts receivable
Inventory
Total current assets
Net fixed assets
Total assets
(All sales are on credit. All calculations assume a 365-day year. The payables period is based on cost of
goods sold.)
Note: Round your answers to the nearest whole dollar.
Liabilities and shareholders' equity
Current liabilities:
71 days
33
days
2.2
times
Accounts payable
Short-term debt
Total current liabilities
Long-term debt
Shareholders' equity
Total liabilities and equity
5
65%
35 days
$
$
1,300,000
2,000,000
7,000,000
Chapter 16 Solutions
CONTEMP.FINANCIAL MGMT. (LL)-W/MINDTAP
Ch. 16 - Prob. 1QTDCh. 16 - Prob. 2QTDCh. 16 - Prob. 3QTDCh. 16 - Prob. 4QTDCh. 16 - Prob. 5QTDCh. 16 - Prob. 6QTDCh. 16 - Prob. 7QTDCh. 16 - Prob. 8QTDCh. 16 - Prob. 9QTDCh. 16 - Prob. 10QTD
Ch. 16 - Prob. 11QTDCh. 16 - Prob. 12QTDCh. 16 - Prob. 13QTDCh. 16 - Prob. 14QTDCh. 16 - Prob. 15QTDCh. 16 - Prob. 16QTDCh. 16 - Prob. 17QTDCh. 16 - Prob. 18QTDCh. 16 - Prob. 19QTDCh. 16 - Prob. 20QTDCh. 16 - Prob. 21QTDCh. 16 - Prob. 22QTDCh. 16 - Prob. 23QTDCh. 16 - Prob. 24QTDCh. 16 - Prob. 1PCh. 16 - Prob. 2PCh. 16 - Prob. 3PCh. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Prob. 6PCh. 16 - Prob. 7PCh. 16 - Prob. 8PCh. 16 - Prob. 9PCh. 16 - Prob. 10PCh. 16 - Prob. 11PCh. 16 - Prob. 12PCh. 16 - Prob. 13PCh. 16 - Prob. 14PCh. 16 - Prob. 15PCh. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Prob. 18PCh. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21PCh. 16 - Prob. 22PCh. 16 - Prob. 23PCh. 16 - Prob. 24PCh. 16 - Prob. 25PCh. 16 - Prob. 26PCh. 16 - Prob. 27PCh. 16 - Prob. 28PCh. 16 - Prob. 29PCh. 16 - Prob. 30PCh. 16 - Prob. 31PCh. 16 - Prob. 32PCh. 16 - Prob. 33PCh. 16 - Prob. 34P
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