Marshall Inc. recently hired your consulting firm to improve the company's performance. It has been highly profitable but has been experiencing cash shortages due to its high growth rate. 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, what is the firm's present cash conversion cycle? Enter your answer rounded to two decimal places. For example, if your answer is 123.45% or 1.2345 then enter as 1.23 in the answer box. Average Inventory = $75,000.00
Annual Sales = $650,000.00
Annual Cost of Goods Sold = $375,000.00
Average Accounts Receivable = $170,000.00
Average Accounts Payable = $30,000.00
Inventory turnover = COGS/inventory |
Inventory turnover = 375000/75000 |
Inventory turnover = 5 |
days of inventory on hand = number of days in a year/inventory turnover |
days of inventory on hand = 365/5 |
days of inventory on hand = 73 |
Receivables turnover = Credit sales/receivables |
Receivables turnover = 650000/170000 |
Receivables turnover = 3.82 |
days of sales outstanding = number of days in a year/receivables turnover |
days of sales outstanding = 365/3.82 |
days of sales outstanding = 95.55 |
Accounts payables turnover = purchases/payables |
Accounts payables turnover = 375000/30000 |
Accounts payables turnover = 12.5 |
days of payables outstanding = number of days in a year/accounts payable turnover |
days of payables outstanding = 365/12.5 |
days of payables outstanding = 29.2 |
Operating cycle = days of sales outstanding + days of inventory on hand |
Operating cycle = 95.55+73 |
Operating cycle = 168.55 |
Cash conversion cycle = Operating cycle - days of payables outstanding |
Cash cycle = 168.55-29.2 |
Cash cycle = 139.35 |
Marshall Inc. recently hired your consulting firm to improve the company's performance. It has been highly...
Marshall Inc. recently hired your consulting firm to improve the company's performance. It has been highly profitable but has been experiencing cash shortages due to its high growth rate. 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, what is the firm's present cash conversion cycle? Average inventory = $75,000 Annual sales = $600,000 Annual cost of goods sold = $360,000 Average accounts receivable = $180,000...
Marshall Inc. recently hired your consulting firm to improve the company's performance. It has been highly profitable but has been experiencing cash shortages due to its high growth rate. 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, what is the firm's present cash conversion cycle? Average inventory = $75,000 Annual sales = $600,000 Annual cost of goods sold = $360,000 Average accounts receivable = $180,000...
Your consulting firm was recently hired to improve the performance of Shin-Soenen Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. 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, what is the firm's present cash conversion cycle? Average inventory = $75,000 Annual sales = $775,000 Annual cost of goods sold = $465,000 Average accounts receivable = $160,000...
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Your consulting firm was recently hired to improve the performance of Rumpke, which has been experiencing cash shortages due to its high growth rate. You want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is the firm's present cash conversion cycle? Average inventory $75,000 Annual sales $500,000 Annual cost of goods sold $360,000 Average accounts receivable $160,000 Average accounts payable $25,000 ACP/DSO ICP PDP CCC 167.4944
12. Marshall Inc. recently hired your conting firm to improve the company's performance. It has been highly profitable but has been experiencing cash shortages due to its high a th me. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information and a 365day year, what is the firm's present cash conversion cycle! $75.000 $600,000 $360,000 $160,000 $25,000 Average inventory Annual sales - Annual cost of goods sold - Average accounts...
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