An analyst gathers the following data for a firm: Sales: $1, 850 Cost of Goods Sold: $501 Inventory: $124 Accounts Receivables: $188 Accounts Payables: $153 Based on this information, calculate the firm's Operating Cash Conversion Cycle.

An analyst gathers the following data for a firm: Sales: $1, 850 Cost of Goods Sold: $501 Inventory: $124 Accounts Receivables: $188 Accounts Payables: $153 Based on this information, calculate the firm's Operating Cash Conversion Cycle.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 12MCQ: Smoltz Company reported the following information for the current year: cost of goods sold,...

See similar textbooks

Related questions

Q: Classifying Bond Transactions- Direct Method Cambell Inc. issued $180,000, 6%, 10-year bonds on…

A: The cash payment of interest is a cash outflow in the operating activities. It will reduce the total…

Q: onsider a project with free cash flows in one year of $106,89 or $112,37, with each outcome being…

A: Cash inflow in year 1= 10689*50% + 11237*50%= 10963

Q: Russell Corp.'s transactions for the year ended December 31, 20X1 included the following: ·…

A: Cash flows from financing activities in cash flows statement shows the inflows and outflows of…

Q: Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would…

A: NPV is time value based method of capital budgeting and can be found as the difference in present…

Q: n calculating IRR for a project, you determine that you must find i* that satisfies (A/P, i, 6) =…

A: IRR of project is the break even rate at which present value of cash flow is equal to initial…

Q: The company that issued the stock that Anita owns just declared a three-for-one stock split earlier…

A: The objective of the question is to understand the impact of a three-for-one stock split on the…

Q: Your firm is contemplating the purchase of a new $595,000 computer-based order entry system. The…

A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…

Q: a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal…

A: Future value is the value that an investment will have in the future after earning a certain rate of…

Q: How much more would you earn in the first investment than in the second investment?

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: CURRENT ASSETS INVESTMENT POLICY Rentz Corporation is investigating the optimal level of current…

A: Return on equity:Return on equity (ROE) is a financial term used to assess how well a business makes…

Q: You need $58000 on March 15, 2024. How much do you need to deposit each quarter in an account…

A: Future value refers to the worth or value of cash flows. Cash flows are compounded at the rate of…

Q: a. What will be the loan balance at the end of year 1? b. If the interest rate increases to 13…

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: You have just purchased a share of stock for $21.34. The company is expected to pay a dividend of…

A: When the company receives profits and distributes them among the shareholders. That share of profit…

Q: Find the present value annuity factor for a 13 year annuity whose annual rate is 4% with daily…

A: The PV of an investment refers to the combined worth of the cash flows of the investment assuming…

Q: Suppose that Gyp Sum Industries currently has the balance sheet shown below, and that sales for the…

A: Increase in Assets = Assets * (Sales, Next Year - Sales Last Year / Sales, Last Year)= $5,225,000 *…

Q: You own a coal mining company and are considering opening a new mine. The mine will cost $115.3…

A: The capital budgeting techniques that are used to calculate the potential investment's net worth and…

Q: You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend…

A: In this problem we have to calculate required rate of return using CAPM and find out required growth…

Q: The Toronto Cancer Society needs $70,000 for the purchase of a new cancer treatment piece of…

A: In this question, we are required to determine the rate of interest.

Q: Duration is: Multiple Choice O O O O O the elasticity of a security's value to small coupon changes.…

A: In this question, we are required to determine the meaning of duration.

Q: Corporations use net present value, internal rate of return, regular payback, and discounted payback…

A: In this question, we are required to determine the best method among the given methods.

Q: The NOI for a small income property is expected to be $155,400 for the first year. Financing will be…

A: Variables in the question:NOI155400DCR1.2Rate of interest10%Amortization period20Capitalization…

Q: Assume a $260,000 investment and the following cash flows for two products: Year 1 2 3 4 Product X…

A: The payback period, a monetary metric, estimates how long it will take an investment to recover its…

Q: If average daily remittances are $1 million, and extended disbursement float adds 12 days to the…

A: Daily cash flow= $1 million= $1,000,000Reduction in time= 12 daysInterest rate= 15%Required:How much…

Q: Titan Corporation has 9.6 million shares of common stock outstanding and 400,000 5.7 percent…

A: Market value of common equity = number of shares outstanding * Market price per shareMarket value of…

Q: 11.The yield to maturity on one-year, zero-coupon bonds is 5%. The yield to maturity on two- year,…

A: one-year forward rate, two year from today = (1+three year rate )^3 /(1+one year rate)^1 × (1+two…

Q: Your firm needs a computerized machine tool lathe which costs $50,000 and requires $12,000 in…

A: Salvage value refers to the estimated residual value or worth of an asset at the end of its useful…

Q: DFS Corporation is currently an all-equity firm, with assets with a market value of $102 million and…

A: The value of the levered firm can be calculated by

Q: You have determined in your mind that you would like to have a business of your own, although your…

A: Working Note#1Calculation of capital expenditure:Capital expenditure=Cost of improvement of…

Q: Whatever Incorporated, has a bond outstanding with a coupon rate of 5.56 percent and semiannual…

A: We will use the below formula to calculate the market price of the bond.Price of the bond =…

Q: At what annual interest rate, compounded annually, would $520 have to be invested for it to grow to…

A: Future Value is that value which includes the interest earned and initial invested amount. It is…

Q: A machine that produces a certain piece must be turned off by the operator after each piece is…

A: Present SystemWith BrakeSaving in HoursTime to produce one unit in seconds105105Coasting time in…

Q: A delivery truck with a book value of $2,900 will be replaced with a new one costing $79,000. The…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: Hollywood Tabloid needs a new state-of-the-art camera to produce its monthly magazine. The company…

A: Present value:The present value is a financial concept that represents the current worth of a…

Q: A company purchased an asset for $3,800,000 that will be used in a 3-year project. The asset is in…

A: In this question, we are required to determine the book value of the equipment at the end of the…

Q: Anita and Jim are looking for stocks that will pay relatively high dividends so that they can use…

A: The objective of the question is to identify the type of stocks that Anita and Jim should purchase…

Q: McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $815 per set and…

A: Payback period is the amount of time to recover initial investment. Payback period = Initial…

Q: r. Jeter, the vice president of finance, has given you the following information and has asked you…

A: WACC is the cost of capital and is the weighted cost of equity, weighted cost of debt and weighted…

Q: Assume that you manage a $10.00 million mutual fund that has a beta of 1.25 and a 9.50% required…

A: Old portfolio valueNew portfolio valueInvestment…

Q: Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a…

A: Dividend paid in year 3 (D3) = $21st stage growth rate = 10.40%2nd stage growth rate = 3.54%Required…

Q: What is the price of a 182-day money market security with a face value of $7,000 if the BEY is…

A: Money market securities are issued by federal bank and these are issued at discount and that depends…

Q: You want to have $5 million when you retire in 40 years. You believe you can earn 9 percent per year…

A: Future value is the compounded value of future cash flows or the amount invested in a fund account…

Q: Hartley Corporation issued $560,000 of 5%, 10-year bonds payable on March 31, 2022. The market…

A: Face Value of the bonds = $576,000Life = 10 YearsCoupon rate = 5% p.a.Market rate of interest = 8%…

Q: Investment $96,000 $132,000 Expected after-tax cash flows: Year 1 $40,000 $52,000 Year…

A: Profitability index is one of the time value based capital budgeting method and is the ratio of…

Q: A preferred stock is expected to pay a constant quarterly dividend of $1.25 per quarter into the…

A: In this question, we are required to determine the price of the preferred stock.

Q: At the ________ break-even point, a project’s net income equals exactly zero. a. cash b. operational…

A: In this question, we are required to fill in the blank.

Q: With the details below, Calculate the net present value (NPV). Alexandria Mining is a midsized coal…

A: Cost of Land 5,500,000.00Cost of Equipment 85,000,000.00Salvage Value after 4 year…

Q: Stock R has a beta of 2.5, Stock S has a beta of 0.45, the required return on an average stock is…

A: Given,The Beta of Stock R is 2.5The beta of stock S is 0.45Average stock return is 10%Risk free rate…

Q: Connor Company reported operating expenses of $325,000 for 20X2. The following data were extracted…

A: Cash flows from operating activities state the cash generated from normal operations.Cash payments…

Q: (Related to Checkpoint 14.1) (Weighted average cost of capital) The target capital structure for QM…

A: Solution:Weighted Average Cost of Capital (WACC) means the average cost of capital for the firm…

Q: You own a bakery that operates 365 days per year, and want to purchase a commercial oven for $3000,…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Formula

VIEW

Step 2: Calculation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Zoogle has the following selected data ($ in millions):Net sales $24,651Net income 6,620Operating cash flows 9,326Total assets, beginning 41,768Total assets, ending 50,497Required:1. Calculate the return on assets.2. Calculate the cash return on assets.3. Calculate the cash flow to sales ratio and the asset turnover ratio.
FMT Trading Inc. has the following financial data: Annual sales 10,000,000Cost of goods sold 6,000,000Inventory 2,547,945Accounts receivable 1,643,836Accounts payable 1,200,000 a. What is the firm’s cash conversion cycle?b. Provide interpretations of the cash conversion cycle period of the firm.
Claculate Delta Airlines' Cash COnversion Cycle based on the following information: Sales 289,729 COGS 196,476 Accounts Receivable 35,419 Inventory 4,248 Accounts Payable 56,227
use the information in the income statement below to calculate operating cash flow (OCF). sales- $1,280 COGS- $620 Dep Exp- $180 EBIT- $480 Int Exp- $110 EBT- $370 Taxes- $78 NI- $292
(1) Use the information below to compute the days in the cash conversion cycle for each company. (2) Which company is more effective at managing cash based on this measure? Sparta Company Athens Company Days' sales in accounts receivable 52 65 Days' sales in inventory 30 34 Days' payable outstanding 37 42 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Use the information below to compute the number of days in the cash conversion cycle for each company. Cash conversion cycle Sparta Company Athens Company > Required 1 Requiredn
What is the cash conversion cycle for XYZ Company, based on the following information? Inventory: $20,000 Daily purchases: $1,000 Receivables: $12,000 Daily revenue: $4,000 Payables: $8,000 Daily purchases: $800
Matilda Company financial statement information has given in the following table.ItemBeginningEndingInventory17831965Accounts Payable25602820Accounts Receivables49204200Revenue12500Cost of sales9500Required:Based on the financial statement information above, calculate the operating and cash cycle.
Dreamz Unlimited INC has accounts payable days of 30 , inventory days of 60 , and accounts receivable days of 35 . What is its Cash conversion cycle?
Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400
Financial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b. Interpret the results computed in (a).
After reviewing the information, calculate the following ratios for Nestlé for 2021:1) Inventory turnover2) Profit margin3) Return on assets4) Free cash flowRound all answers to two decimal places.
Preparing the direct method statement of cash flows Red Toy Company reported the following comparative balance sheet: Requirements Compute the collections from customers during 2018 for Red Toy Company. Sales Revenue totaled $134,000. Compute the payments for inventory during 2018. Cost of Goods Sold was $79,000.