Question
1. The Mex corporation has an inventory conversion period of 75 days , a receivables conversion period of 38 days, and a payables deferral period
1. The "Mex" corporation has an inventory conversion period of 75 days , a receivables conversion period of 38 days, and a payables deferral period of 30 days .
a) what is the length of the company's cash conversion cycle (CCC)? Interpret it.
b) give some examples of methods of shortening the CCC .
c) what is the length of the company's operating cycle ?Interpret it.
2. SLC company expects, that in the next year receivables will grow from PLN 250,000 to PLN 330,000. Simultaneously the company wants to shorten the inventory conversion period from 58 to 40 days. The company's sales revenues amount to PLN 1,200,000 annually. Calculate the change in cash conversion cycle and interpret it.
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