Firm operating cycle-firm cash conversion cycle

Assignment Help Accounting Basics
Reference no: EM13148857

American Products is concerned about managing cash efficiently. On the average, inventories have an age of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. The firm has annual sales of about $30 million. Assume there is no difference in the investment per dollar of sales in inventory, receivables, and payables; and a 365-day year.

  • Calculate the firm's operating cycle.
  • Calculate the firm's cash conversion cycle.
  • Calculate the amount of resources needed to support the firm's cash conversion cycle.
  • Discuss how management might be able to reduce the cash conversion cycle.

Reference no: EM13148857

Questions Cloud

Find the concentration of ammonia in the solution : A solution is prepared by dissolving 0.16 mol of acetic acid and 0.16 mol of ammonium chloride in enough water to make 1.0 { L} of solution. Find the concentration of ammonia in the solution.
How will an increase in the savings rate affect the growth : How will an increase in the savings rate affect the growth rate of per capita output in an endogenous growth model?
What would the cardia output be of a patient : What would the cardia output be of a patient with a blood pressure of 120/75, a pulse rate of 40 beats/minute, a stroke volume of 70mL/beat, and a respiratory rate of 25 breaths a minute?
Explain are snow and cold weather independent events : On a December day, the probability of snow is .30. The probability of a "cold" day is .50. The probability of snow and "cold" weather is .15. Are snow and "cold" weather independent events?
Firm operating cycle-firm cash conversion cycle : Calculate the firm's operating cycle. Calculate the firm's cash conversion cycle. Calculate the amount of resources needed to support the firm's cash conversion cycle. Discuss how management might be able to reduce the cash conversion cycle.
Describe an amino acid that is nonessential : To maintain adequate nutrition, animals require dietary access to certain amino acids. How would you describe an amino acid that is "nonessential"? Provide an example of a nonessential amino acid.
What type of reaction occurs prior to the substitution : What type of reaction occurs prior to the substitution reaction to form a new good leaving group? And please explain why? a. nothing b. an acid base reaction
What is the molar mass of a gas : What is the molar mass of a gas if 0.250 g of the gas occupies 215 mL at 618 mmHg and 30.0°C?
Find mean nicotine content of brand of cigarettes is greater : To determine whether the mean nicotine content of a brand of cigarettes is greater than the advertised value of 1.4 milligrams, a health advocacy group tests.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Interest expense apportioned to us source income

Global World's worldwide asstes have an adjusted basis of $5,000,000 and a value of $10,000,000, of which assets having an adjusted basis of $4,000,000 and a value of $6,000,000 generate U. S.-source income. How much of the interest expense is app..

  Does the aicpa code of professional conduct discuss

Does the AICPA Code of Professional Conduct discuss the collegial responsibilities of CPA firms?In your opinion,were representatives of either Ernst & Young or Kenneth Leventhal &Company unprofessional in this regard during their congressional tes..

  Prepare the journal entries for the transactions

Bentz Corporation bought and sold several securities during 2006. Listed below is a summary of the transactions.  Prepare the journal entries for the above transactions. Show calculations.

  Deduction on her individual tax return

Dawn Adams owns 60 percent of a calendar-year S corporation during 2008. Her stock basis on December 31, 2008, is $17,000, and her debt basis is $2,000. If the S corporation incurs a $48,000 loss for 2009, what amount may Ms. Adams deduct on her i..

  What entry is required in the depositors accounts

A check drawn by a depositor in payment of a voucher for $925 was recorded in the journal as $295. What entry is required in the depositor's accounts?

  Strategy for gm

Write a strategy on how GM should operate its financial aspect of the company to improve sales.

  Consolidated earnings-euro movement

Mercury's consolidated earnings were ____ affected by the euro's movement, and Mercury's hedge position was ____ affected by the euro's movement.

  Calculation of the non-controlling interest for the effects

Choose a public company financial statement - 10k or annual report. Review the footnote disclosures related to intercompany activity. How important is this activity to the consolidated group? Where do you find this information? Be sure and post a ..

  Effects on break even points

Would each of the following increase, decrease, or have an indeterminant effect on a firm's breakeven point (unit sales)?

  What is ems break-even sales volume

EM Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and operating profits were $180,000. What is EM's break-even sales volume? $660,000 $1,540,000 $1,600,000 $2,020,000.

  Compute the accounts receivable balance

Determine the EOQ before and after the change in the cash discount policy. Translate this into average inventory (in units and dollars) before and after the change in the cash discount policy.

  Question about philosophy of life

Why are we here? What is my purpose to be here? Am I supposed to be doing something great with my life? For thousands of years, men and women have pondered these and similar questions.

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