Part 1) The following figures are extracted from the recent financial statements of a manufacturer called...
Part 1)
The following figures are extracted from the recent financial statements of a manufacturer called Technograph. The company produces custom-use monitors and has a large amount of working capital due to many purchases of electronic materials from suppliers, inventory of finished goods and work-in-process. However, due to recent hikes in loan rates the cost of financing has gone up and the management is not happy with the large amount of cash that is being tied up in the firm.
Management first wants to know how long cash is tied up in the operations, from the time it is spent on raw materials to the time it is recovered through sales.
| Starting inventory | 12843 |
|---|---|
| Ending inventory | 1293 |
| Starting Accounts Receivable | 7193 |
| Ending Accounts Receivable | 6594 |
| Starting Accounts Payable | 4384 |
| Ending Accounts Payable | 5615 |
| COGS | 112101 |
| Sales | 130721 |
What is the average Inventory? ____________________
What is the average Accounts Receivable? ____________________
What is the average Accounts Payable? ___________________
Part 2)
What is the Days of Inventory Outstanding? ____________________
What is the Days of Payables Outstanding? ____________________
What is the Days of Sales Outstanding? _______________________
Part 3)
What is the cash to cash cycle (cash conversion cycle) for the company? Answer in full days: _____________________
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Part 1)
The following figures are extracted from the recent financial
statements of a manufacturer called...
1.Zebra Company reports the following figures for the years ending December 31, 2019 and 2018: 2019...
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A firm takes 30 days to collect its accounts receivables and 45 days to pay its accounts payable. Its average age of inventory is 75 days. Its annual sales are $800,000 with COGS of $350,000 and purchases of $220,000. 1. What is the firm's cash conversion cycle (CCC)? What does it measure? 2. What is the amount of resources tied up in the CCC in each of the following areas: a Inventory b Accounts receivable C Accounts payable Cash 3...
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