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

Assignment Help
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
Calculate the expected profit and rate of return on investment for each division and for the company as a whole in the coming year, if Division B purchases its motors from D
Explain the management accountant's role in helping organisations design stronger incentive systems for their employees. Explain the role of benchmarking in evaluating manager
What does it mean to measure innovation? Advantages and disadvantages of measuring innovation. Presentation of a model that can be applied to measuring innovation; or a timeli
What is the goal of the EOQ model and why does a firm hold "safety stock? and what costs are a firm trying to balance when it decides on how much safety stock to hold?
Evaluate beyond budgeting as a management technique. Use the APA referencing through out the document.(go online to see guidance) Please also include in-text referencing + f
Briefly discuss the ways a realistic budget will benefit the owner of Babycakes versus having no budget at all. Be sure to use Babycakes as the company and any specific prod
Calculate the Present Value of salary differential for completing the certification program. Subtract thecost of the program to get the NPV ( net present value) of undertaki
Marion Chemicals produces a chemical used as a base in paints. In the manufacturing process, all materials are added at the start of the process, whereas labor and overhead