Why are the days inventory and days accounts payable important?
Why are the days inventory and days accounts payable important?
Homework Answers
Days inventory calculations are important in order to have efficient operations. As per the industry practice, the organizations keep some days of inventory at hand. This has two benefits:
- Stockouts do not happen which could otherwise lead to a loss of sales.
- Extra warehousing costs are not borne if efficient amount of inventory is kept.
Days accounts payable is the total days needed to payback the owed amount to suppliers etc. It is important in calculation as it provides an efficient setup where the extra cost for credit purchases is not borne. Also, if days payable are more that the credit sales payment period as per industry, then there is a risk of suppliers not providing further supplies.
Loblaws has an inventory turnover rate of 12.3, an accounts payable period of 30 days, and...
Loblaws has an inventory turnover rate of 12.3, an accounts payable period of 30 days, and an accounts receivable period of 40 days. What is the length of the cash cycle? 39.67 days 41.13 days 37.88 days 34.42 days 30.71 days
Describe the term Days Payable Outstanding. How is this important to a procurement manager and why is...
Describe the term Days Payable Outstanding. How is this important to a procurement manager and why is it a major negotiation strategy? (5 points)
13. Ives Corp. has an inventory period of 22.8 days, an accounts payable period of 38.3...
13. Ives Corp. has an inventory period of 22.8 days, an accounts payable period of 38.3 days, and an accounts receivable period of 32.3 days. What is the company's cash cycle? A. 55.1 days B. 47.8 days
The cash operating cycle can be computed as ________. A.days accounts payable outstanding + days sales...
The cash operating cycle can be computed as ________. A.days accounts payable outstanding + days sales outstanding minus− days inventory on hand B.days accounts payable outstanding minus− days sales outstanding minus− days inventory on hand C.days accounts payable outstanding minus− days sales outstanding + days inventory on hand D. days accounts payable outstanding + days sales outstanding + days inventory on hand
Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the...
Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the accounts receivable period is 50 days. How long is the inventory period? O 5 days O 35 days O 45 days O 40 days
Inmoo Company's average age of accounts receivable is 68 days, the average age of accounts payable...
Inmoo Company's average age of accounts receivable is 68 days, the average age of accounts payable is 40 days, and the average age of inventory is 69 days. Assuming a 365-day year, what is the length of its cash conversion cycle? a. 104 days b. 113 days c. 97 days d. 76 days e. 114 days
My chosen answer is wrong. I know I have to use the accounts payable turnover formula and the turnover expressed in days...
My chosen answer is wrong. I
know I have to use the accounts payable turnover formula and the
turnover expressed in days formula. The formulas are:
Accounts payable turnover (T/O) = Purchases from suppliers
(assumed all on credit) ÷ Average accounts payable
Turnover expressed in days = 365 ÷ T/O (computed from the
formula above)
A company reports Cost of Goods Sold of $275,000, Ending Inventory of $120,000, Beginning Inventory of $15,000, Ending Accounts Payable of $110,000 and Beginning Accounts...
Suppose the operating cycle is 60 days, the accounts payable period is 15 days, and the...
Suppose the operating cycle is 60 days, the accounts payable period is 15 days, and the accounts receivable period 40 days. How long is the cash cycle? o 20 days o 25 days O 45 days O 75 days
If the accounts payable turnover is 5.2, what is the days' payable outstanding? (Round your answer...
If the accounts payable turnover is 5.2, what is the days' payable outstanding? (Round your answer to the nearest day.) A. 70 days. B. 60 days C. 57 days. D. 20 days.
West Chester automation has an inventory turnover of 17.5 and an accounts payable turnover of 11....
West Chester automation has an inventory turnover of 17.5 and an accounts payable turnover of 11. The accounts receivable period is 36 days. What is the length of the cash cycle?
13. Ives Corp. has an inventory period of 22.8 days, an accounts payable period of 38.3 days, and an accounts receivable period of 32.3 days. What is the company's cash cycle? A. 55.1 days B. 47.8 days
Suppose the cash cycle is 85 days, the accounts payable period is 10 days, and the accounts receivable period is 50 days. How long is the inventory period? O 5 days O 35 days O 45 days O 40 days
My chosen answer is wrong. I
know I have to use the accounts payable turnover formula and the
turnover expressed in days formula. The formulas are:
Accounts payable turnover (T/O) = Purchases from suppliers
(assumed all on credit) ÷ Average accounts payable
Turnover expressed in days = 365 ÷ T/O (computed from the
formula above)
A company reports Cost of Goods Sold of $275,000, Ending Inventory of $120,000, Beginning Inventory of $15,000, Ending Accounts Payable of $110,000 and Beginning Accounts...
Suppose the operating cycle is 60 days, the accounts payable period is 15 days, and the accounts receivable period 40 days. How long is the cash cycle? o 20 days o 25 days O 45 days O 75 days
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