Robinson expects its 2015 sales and cost of goods sold to grow by 5 percent over their

Question:

Robinson expects its 2015 sales and cost of goods sold to grow by 5 percent over their 2014 levels.
a) What will be the effect on its levels of receivables, inventories, and payments if the components of its remain at their 2014 levels? What will be its net investment in working capital?
b) What will be the impact on its net investment in working capital in 2015 if Robinson is able to reduce its collection period by 5 days, its inventory period by 6 days, and increase its payment period by 2 day?
Cash Conversion Cycle
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,...