Calculate the firms cash conversion cycle

Assignment Help Financial Accounting
Reference no: EM13517024

John Industries (Garrett Industries) turns over its inventory 6 times each year it has an average collection period of 45 days and an average payment period of 30 days the firm annual sales are 3 million assume no change in investment per dollar of sales in inventory receivable and payables: and a 365-day year

A. Calculate the firm's cash conversion cycle, its daily cash operation expenditure and the amount of resources needed to support its cash conversion cycle.

B. Find the firm cash conversion cycle and resource investment requirement if it make the following changes simultaneously 1. shorten the average age of inventory by 5 daye 2. speeds the collection of accounts receivable by an average of 10 days 3. extend the average payment period by 10 days

C. If the firm pays 13% for its resource investment n, by how much , if anything could it increase its annual profit as a result of change in part

D. If the annual cost of achieving the profit is in part c is $35, 000 what action would you recommend to the firm and why?

Reference no: EM13517024

Questions Cloud

How does affect unreserved fund balance : Assume encumbrances do not expire at year-end. $15,000 was encumbered during the prior year for a computer and the actual cost of the computer in the current year is $12,000. How does this affect unreserved fund balance?
Evaluate the time in hours which would have been required : Calculate the time in hours which would have been required for 99.9% of the t-butyl chloride to hydrolyze, if the reactant had been allowed to proceed without the addition of extra water or heating
Find the systems original elastic potential energy : Two blocks of masses m and 3m are placed on a frictionless, horizontal surface. A light spring is attached to the more massive block, Find the system's original elastic potential energy
Define manometer was connected to a bulb containing nitrogen : A manometer was connected to a bulb containing nitrogen under slight pressure. The gas was allowed to escape through a small pinhole, and the time for the manometer reading to drop from 65.1 cm to 42.1 cm was 18.5 s.
Calculate the firms cash conversion cycle : Calculate the firms cash conversion cycle, its daily cash operation expenditure and the amount of resources needed to support its cash conversion cycle.
Determine the estimating cost function with machine-hours : Determine the estimating cost function with machine-hours as the cost driver Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver.
Find the cyclotron radius for these particles : A laboratory cyclotron is used to accelerate alpha particles (He+2) with a Kinetic Energy of 184 MeV. The cyclotron radius r for these particles is
What is the difference in energy between these two levels : The of is accompanied by a ray of measured wavelength 2.48×10?2. What is the difference in energy between these two levels
Futures contracts and portfolio management : Suppose you can earn 6% riskfree forever. You will need $100,000 in 12 years. A hypothetical riskfree zero coupon bond will "bullet immunize" this cash requirement.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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