Knowledge on cash conversion cycle
Course:- Managerial Accounting
Reference No.:- EM1349679

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

Ferguson Inc., has annual sales of $36,500,000 or $100,000 a day on a 365-day basis. On average, the company has $8,000,000 in inventory and $12,000,000 in accounts receivable. Its CFO has proposed new policies that would result in a 20% reduction in average inventories and a 24% reduction in average accounts receivables. He also anticipates that these policies would reduce sales by 10%, while accounts payable would remain unchanged. What effect would these policies have on the company's cash conversion cycle? Round to the nearest whole day.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Managerial Accounting) Materials
Which provides the best information on profitability: a single overhead cost pool with head- count as the allocation base, or multiple cost pools using headcount, sales, and s
Assuming a periodic inventory system and based upon the information above, please determine the COGS and Ending Inventory for year 2008 under the following inventory valuati
Calculate Current Ratio and Quick Asset Ratio for the years 2015 and 2014. Show it in a table as in the previous sections and comment on the Company's liquidity position
Columbia's management feels that the time value of money should be considered in all long-term decisions. Briefly discuss the rationale that underlies management's belief.
Bottled Water Company Comprehensive Master Budget - Prepare an executive summary to Ginnie Adams, the owner of the Bottled Water Company, with your results from the comprehen
Why would a business like UPS or eBay be concerned with looking at contribution margin by market segment? Can you recognize kinds of market segments?
Mike is aware that you have some expertise in accounting information systems and has asked for your assistance to design a logical database structure for his business.
Evaluate the cost of the raw materials used in production during the year and what is the total amount of the costs listed above that are not direct costs of the Brentwood