Cash conversion cycle-cash freed up-pre-tax profit
Course:- Managerial Accounting
Reference No.:- EM1349699

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Managerial Accounting

Primrose Corp has $15 million of sales, $2 million of inventories, $3 million of receivables, and $1 million of payables. Its cost cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 8% rate. What is Primrose's cash conversion cycle (CCC)? If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting either sales or cost of goods sold, what would the new CCC be, how much cash would be freed up, and how would that affect pre-tax profits?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Managerial Accounting) Materials
Prepare a production report for the Assembly Department for February using the weighted average method of costing. The report should disclose the physical flow of units.
Preparation of a schedule of costo goods Manufactured and cost goods sold. The following cost and inventory data for the just completed year are taken from the accounting reco
Determine the break even point in units. The company has a capacity of 150,000 units and is currently at two thirds of its capacity. The sales manager believes the company
Many firms' compensation plans reward managers based on reported annual income. How might the cost method of accounting for significant investments have resulted in unint
Production budget in units and direct material usage budget and direct material purchases budget, direct manufacturing labour cost budget
After a study of its processes, a firm determines it has the following 4 overhead cost pools related to the production of its 2 products: Set-up, Shipping, Product design,
What client mix will maximize Spencer's monthly commissions, assuming he works 200 hours per month - what are the activity - cost driver rates for the supervision of direct l
Write a brief report explaining the reason or reasons that best explain why Alcoa uses the LIFO cost flow method for its inventories kept in the United States and Canada, but