Cash Conversion Cycle = DSO + DIO – DPO
DSO is days sales outstanding = Average Accounts Receivable ×
365 ÷ Credit Sales
DIO is days inventory outstanding = Average Inventories × 365 ÷
Cost of Goods Sold
DPO is days payables outstanding = Average Accounts Payable × 365 ÷
Cost of Goods Sold
Ace Retailers has negative cash conversion cycle of 35 & 39 days during the two-year period which suggests an exceptionally good working capital management. It means that Ace Retailers could sell and receive cash from its sales even 35 & 39 days before it actually made payments against its production inputs
First option is correct
QUESTION 15 Use the following information for Ace Retailers to answer the question Pnancial radios for...
QUESTION 4 As a barometer of short-term liquidity the current ratio is limited by the nature of its components. All of the following are reasons that this is true except: C A firm could have a high current ratio but not be able to meet demands for cash because inventory is salable only at discounted rices. C The balance sheet is prepared as of a particular date and the actual amount of liquid assets may vary considerably from the date...
Case 5.2 Avnet (AVT/NYSE) Summary of Financial Statement Ratios Show Formulas Avnet, a leading distributor of electronic components, enterprise computer and storage products and embedded subsystems, appears to be on the road to recovery in 2010, after a volatile three year period. The recent downturn in the economy presented challenges for many firms, including Avnet, with 2009 being a particularly difficult year. A discussion of the financial well- bcing of Avnct follows, as well as recommendations for investors and creditors....
Problem 14-15 Comprehensive Ratio Analysis (LO14-2, LO14-3, LO14-4, LO14-5, LO14-6) [The following information applies to the questions displayed below.) You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, including comparing Lydex's performance to its major competitors. The company's financial statements for the last two years are as follows: Last Year Lydex Company Comparative Balance Sheet This Year...
Required information [The following information applies to the questions displayed below.] You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 1,020,000 $ 1,260,000...
Please answer part 1, 2 and 3. Required information Problem 15-15 Comprehensive Ratio Analysis [L015-2, Lo15-3, LO15-4, Lo15-5, LO15-6) The following information applies to the questions displayed below] You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company's financial statements, including comparing Lydex's performance to its major competitors. The company's financial statements for the last two years are as follows:...
This is sufficent information to answer the question. solve for 2018 1. From the company's most recent financial statements, find the company's a. total revenue b. total cost of revenue C. average cash (two-year average) d. average accounts receivable (two-year average) e. average inventory (two-year average) f. average accounts payable (two-year average) 2. Calculate the company's net operating working capital 3. Determine the company's daily dollar volume of sales 4. Determine the company's daily cost of goods sold 5a. Calculate...
Required information Problem 14-15 Comprehensive Ratio Analysis [LO14-2, LO14-3, LO14-4, LO14-5, LO14-6] [The following information applies to the questions displayed below.] You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year...
Problem 14-15 Comprehensive Ratio Analysis [LO14-2, LO14-3, LO14-4, LO14-5, LO14-6] [The following information applies to the questions displayed below.] You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year...
Use the following information about Company X to help answer problems 1-10. Company X went public at the start of 2016, $100M shares of stock were issued at $18.60 per share. At the end of 2016, Company X traded at $20.00 per share. During 2017, Company X issued 5 shares at $20.00 per share, thus raising $100M of capital At the end of 2017, Company X traded at $20.46 per share. A summary of Company X's 2016 and 2017 10k...