What is primrose cash conversion cycle

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Primrose Corp has $15million of sales, $2million of inventories, $3million of receivables and $1million of payables. Its 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?

 

 

Reference no: EM13689047

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