How would impact cash conversion cycle

Assignment Help Financial Accounting
Reference no: EM132606750

Carraway Seed Company Inc. has for many years cultivated and sold what are known as heritage plants and seeds. For? example, the company has sought out older varieties of tomato plants that are no longer grown by commercial vegetable farmers since they either take too long to? mature, do not ship? well, or do not hold up for long on the store shelf. The company has recently been considering ways to reduce its investment in working capital in order to make itself more profitable. At present the firm has an inventory conversion period of 81 days and the majority of its customers take advantage of its credit terms of 24 days. The company purchases its inventory items on credit terms that allow them 46 days to pay but has always followed a policy of making cash payments for invoices as soon as they are? received, so the accounts payable deferral period is typically only 6 days.

Question a. What are? Carraway's operating and cash conversion? cycles?

Question b. If Carraway were to decide to take full advantage of its credit terms and delay payment until the last possible? date, how would this impact their cash conversion? cycle?

Question c. What would be your recommendation to the company with regard to its working capital management practices and? why?

Reference no: EM132606750

Reviews

Write a Review

 

Financial Accounting Questions & Answers

  Prepare income statement and statement of financial position

Using figures from the adjusted trial balance prepared in b, Prepare Income Statement and Statement of Financial position of ESSAC comapany

  Invest in the money market

Plan to use the savings over the next five years to make a down payment. She needs 15000 in 5 years how much does she need to invest in the money market account semi-annually over the next five years.

  Transactions took place for parkers grocery

The following transactions took place for Parker’s Grocery. Prepare the journal entries that Parker's Grocery would record for the above transactions.

  What causes variances in a budget at the end of a quarter

What causes variances in a budget at the end of a quarter? When the budgeted number is above or below the expected results

  Compute cash flows from operating activities-indirect method

Compute cash flows from operating activities—indirect method-The accounting records of Michigan Fur Traders include these accounts:

  Assume the standard deduction last year

L. A. and Paula file as married taxpayers. In August of this year, they received a $6,920 refund of state income taxes that they paid last year. How much of the refund, if any, must L. A. and Paula include in gross income under the following independ..

  Determine the cost of merchandise sold for march

Cost of Merchandise Sold - Based on the subsequent data, determine the cost of merchandise sold for March:

  Are the disclosures included in the swiss annual report

Are the disclosures included in the swiss annual report really "unnecessary"? Explain. What social, economic, and institutional factors in switzerland might be causing the inclusion of these disclosures?

  Find what is the intrinsic value of rrv common stock

What is the intrinsic value of RRV's common stock? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box.

  Evaluate the strengths of new phone control environment

New Phone Inc., a diversified manufacturer, has five divisions that operated throughout the United States and Costa Rico. New Phone Inc. has historically allowed its divisions to operate autonomously. Corporate intervention occurred only when planned..

  What health insurance expansion in the united states

What health insurance expansion in the United States. What are the economic implications of health insurance expansions for health care organizations

  Determine the cost of goods available for sale

Determine the cost of goods available for sale - Prove te accuracy of the cost of goods sold under the FIFO and LIFO mehtods.

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