EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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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.
Complete the balance sheet and sales information using the following financial data:Total assets turnover: 1.1×Days sales outstanding: 73.0 daysaInventory turnover ratio: 4×Fixed assets turnover: 2.5×Current ratio: 2.0×Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20%aCalculation is based on a 365-day year.
Do not round intermediate calculations. Round your answers to the nearest dollar.
Balance Sheet
Cash
$
Current liabilities
$
Accounts receivable
Long-term debt
54,000
Inventories
Common stock
Fixed assets
Retained earnings
108,000
Total assets
$360,000
Total liabilities and equity
$
Sales
$
Cost of goods sold
$
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?
Chapter 16 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
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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