Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
For several firms trade payables - suppliers of goods and services - represent the major component of current liabilities the amounts owed by the company which have to be repaid within the next accounting period. Together with inventory and receivables - current liabilities current assets - cash, determine the firm's net working capital position example the net sum it invests in working capital.
Different suppliers will work different credit periods but the average trade credit period in days can be calculated as follows
Trade payables/Credit purchases × 365
Occasionally it is expressed in terms of total purchases and sometimes in terms of overall cost of sales. The length of the trade credit period depends partially on competitive relationships among suppliers and partly on the firm's own working capital policy.
The trade credit period is an significant element in a company's cash conversion cycle - the length of time between a firm making payment for its purchases of materials and labour and receiving payment for its sales. The time period above which net current assets have to be financed depends not only on policy towards suppliers but also on receivables management and inventory control policy
Cash conversion cycle = [Receivables days + inventory period] - [trade credit period]
John Chan considers buying a six-month stock futures contract on the shares of Li & Fung Limited. Shares of Li & Fung Limited are now trading at $50 per share and it is expected th
The Rohr Company's old equipment for making subassemblies is worn out. The company is considering two alternatives: a) Completely replacing the old equipment with new equipment
Q. Explain Zero Base Budget? Zero base budgeting can be defined as - 1) An operating planning and budgeting process which requires each manager to justify his entire budget
Evaluate the following statements, and explain why you agree or disagree. (a) In a recent interview, a Wall Street investment banker commented on the infrequent use of Prefer
Prepare a cash budget The following information appeared on the balance sheet of XYZ Ltd at 30 June 2012: Accounts receivable
Q. What is Materiality? Materiality - Magnitude of an omission or misstatements of ACCOUNTING information that, in the light of surrounding circumstances, makes it probable tha
The business is considering two proposals for their promotions of the professional courses.Proposal one could give a stable return throughout the period. Proposal Two would give hi
Q. Internal Control Over Financial Reporting? Internal Control Over Financial Reporting - A process designed by, or under supervision of company's principal executive and princ
WACC and gearing There are two major theories linking a company's WACC and its gearing ratio. (i) The usual theory of gearing proposes a "U" shaped WACC curve. Cost of c
First's current stock price is $260. The price may rise to $300 or fall to $170 in one month. The risk-free interest rate is 18% per year. a. Using the replication portfolio app
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd