Multiple changes in cash conversion cycle garrett industries turns over its inventory
six time...
Business, 19.11.2019 06:31 sarahhN7534
Multiple changes in cash conversion cycle garrett industries turns over its inventory
six times each year; it has an average collection period of 45 days and an average
payment period of 30 days. the firm’s annual sales are $3 million. assume that
there is no difference in the investment per dollar of sales in inventory, receivables,
and payables, and assume a 365-day year.
a. calculate the firm’s cash conversion cycle, its daily cash operating expenditure,
and the amount of resources needed to support its cash conversion cycle.
b. find the firm’s cash conversion cycle and resource investment requirement if it
makes the following changes simultaneously.
(1) shortens the average age of inventory by 5 days.
(2) speeds the collection of accounts receivable by an average of 10 days.
(3) extends the average payment period by 10 days.
c. if the firm pays 13% for its resource investment, by how much, if anything,
could it increase its annual profit as a result of the changes in part b?
d. if the annual cost of achieving the profit in part c is $35,000, what action would
you recommend to the firm? why?
Answers: 1
Business, 22.06.2019 23:50, lolabizzer
For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar. spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements. cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery. rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer. gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life. esquire company provides financial statements to external users every three years.
Answers: 1
English, 25.09.2020 02:01
Mathematics, 25.09.2020 02:01
Mathematics, 25.09.2020 02:01
Mathematics, 25.09.2020 02:01