Sims Electric Corp has been striving for the last 5 years to improve its management of working capital Historical data for the firms sales, accounts receivable, inventories, and accounts payable follow a Calculate Sims days of sales outstanding and days of sales in inventory for each of the 5 years...

DATA Jan10 Jan11 Jan12 Jan13 Jan14 SalesNet 2873 3475 5296 7759 12327 ReceivablesTotal 411 538 726 9 ...

Sims Electric Corp. has been striving for the last 5 years to improve its management of working

Question:

Sims Electric Corp. has been striving for the last 5 years to improve its management of working capital. Historical data for the firm€™s sales, inventories, and accounts payable follow:

a. Calculate Sims€™ days of sales outstanding and days of sales in inventory for each of the 5 years. What has Sims accomplished in its attempts to better manage its investments in accounts receivable and inventory?
b. Calculate Sims€™ cash conversion cycle for each of the 5 years. Evaluate Sims€™ overall management of its working capital.

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,... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...