Calculate christie''s cash conversion cycle

Assignment Help Finance Basics
Reference no: EM131103520

The Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash flow cycle. Christie's sales last year (all on credit) were $150,000, and it earned a net profit of 6 percent, or $9,000. It turned over its inventory 5 times during the year, and its DSO was 36.5 days. The firm had fixed assets totaling $35,000. Christie's payables deferral period is 40 days.
a. Calculate Christie's cash conversion cycle.
b. Assuming Christie holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA.
c. Suppose Christie's managers believe that the inventory turnover can be raised to 7.3 times. What would Christie's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 7.3 for the year?

Reference no: EM131103520

Estimate pharma sustainable sales growth rate based

Estimate Pharma's sustainable sales growth rate based on its 2010 financial statements. What financial policy change might Pharma Biotech make to improve its sustainable growt

What is the investments internal rate of return

Your firm is considering an investment that will cost $920,000 today. the investment will produce cash flows of $450,000 in year 1, $270,000 in years 2 through 4, and $200,0

Herding/bandwagon effect and overreaction towards new inform

Herding/Bandwagon Effect: This is the tendency for individual traders to mimic the actions (rational or irrational) of the market. Individually, the trader would not necessari

Calculate normal distribution and cumulative distribution

Calculate the normal distribution and cumulative distribution for "d" ranging from -5 to +5 in increments of 0.2. Assume the distribution is standard normal (mean = 0, varia

What is the value of the option to wait if the applicable

If you commence a project today, you will have initial costs of $16,000 and annual cash inflows of $9,900 for two years. If you wait until next year to start this project, you

What are techniques that can be used to adjust differences

The dollars used for investment expenditures made today are different from the cash flows to be realized in the future. What are these differences? What are some of the te

What is the coupon rate of the bonds

If current rates are 5.05%, and a single bond is worth $1,152.36 today, what is the coupon rate of the bonds. What are your options concerning The Quiz Master? What, if anythi

Determine the deposit at the end of each month

You would like to have $1,000,000 in 33 years by making regular deposits at the end of each month in an annuity that pays 7% compounded monthly. Determine the deposit at the


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd