Inventory turnover = Annual sales / Average Inventory
Inventory turnover = $30,000,000 / $5,000,000
Inventory turnover = 6 times
Inventory Conversion Period = 365 days / inventory turnover ratio
Inventory Conversion Period = 365 days / 6
Inventory Conversion Period = 60.83 days
5 points ABC Co., Inc. has Php 5,000,000 of inventory on average and annual sales of...
Margetis Inc. carries an average inventory of $750,000. Its annual sales are $10 million, its cost of goods sold is 75% of annual sales, and its average collectionperiod is twice as long as its inventory conversion period. The firm buys on terms of net 30 days, and it pays on time. Its new CFO wants to decrease the cashconversion cycle by 10 days, based on a 365-day year. He believes he can reduce the average inventory to $647,260 with no...
Jordan Air Inc. has average inventory of $1,000,000. Its estimated annual sales are 15 million and the firm estimates its receivables collection period to be twice as long as its inventory conversion period. The firm pays its trade credit on time; its terms are net 30. The firm wants to decrease its cash conversion cycle by 10 days. It believes that it can reduce its average inventory to $900,000. Assume a 360-day year and that sales will not change. Cost...
An analyst has obtained the following information about ABC, Inc. Sales: $63,261 COGS = $13,747 Accounts Receivables = $11,241 Accounts Payable = $8,601 Inventory = $8,637 Assume 365 days. What is the Inventory Period? That is, what is the Days Inventory Held? Enter your answer rounded off to two decimal points.
Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 73 days, an average collection period of 40 days, and a payables deferral period of 37 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. 1. What is the length of the firm's cash conversion cycle? days 2. If Negus's annual sales are $3,437,675 and all sales are on credit, what is the firm's investment in accounts receivable? Round...
Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 72 days, an average collection period of 48 days, and a payables deferral period of 24 days. Assume that cost of goods sold is 80% of sales. Assume a 365-day year. Do not round intermediate calculations. a. What is the length of the firm's cash conversion cycle? Round your answer to the nearest whole number. days b. If annual sales are $4,818,000 and all sales are on credit, what...
Zane Corporation has an inventory conversion period of 69 days, an average collection period of 43 days, and a payables deferral period of 23 days. Assume 365 days in year for your calculations. What is the length of the cash conversion cycle? Round your answer to two decimal places. days If Zane's annual sales are $2,181,245 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest...
Zane Corporation has an inventory conversion period of 83 days, an average collection period of 33 days, and a payables deferral period of 40 days. Assume 365 days in year for your calculations. a. What is the length of the cash conversion cycle? Round your answer to two decimal places. 76 days b. If Zane's annual sales are $4,278,570 and all sales are on credit, what is the investment in accounts receivable? Round your answer to the nearest cent. Do...
ABC has $32 million of inventory and $31 million of accounts receivable. Its average daily sales are $851,000 and its gross profit margin is 22 percent. The company’s payables deferral period is 54.2 days. What is the length of the firm's cash conversion cycle?
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 70 days, an average collection period of 48 days, and a payables deferral period of 38 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What is the length of the firm's cash conversion cycle? days If Negus's annual sales are $3,106,575 and all sales are on credit, what is the firm's investment in accounts receivable? Round...
Problem 16-11 Cash Conversion Cycle Negus Enterprises has an inventory conversion period of 58 days, an average collection period of 37 days, and a payables deferral period of 31 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. What is the length of the firm's cash conversion cycle? days If Negus's annual sales are $3,123,300 and all sales are on credit, what is the firm's investment in accounts receivable? Round...