4. Cash conversion cycle Cash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash. Consider the case of the Red Hamster Manufacturing Corporation: Red Hamster Manufacturing Corporation has forecasted sales of $24,000,000 for next year and expects its cost of goods sold (COGS) to remain at 70% of sales, Currently, the film holds $2,700,000 in inventories, $1,800,000 in accounts receivable, and $2,400,000 in accounts payable Approximately how long does it take Red Hamster Manufacturing to convert its raw materials to its finished products and then to sell those goods? (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places) 52.79 days 16.93 doys 61159 days 58.66 days On average, it takes from the time a sale is made until the time cash is collected from customers after the Red Hamster Manufacturing relies on customer credit when it buys raw materials from its suppliers. On average, it takes firm purchases materials before it sends cash to its suppliers. The length of Red Hamster Manufacturing's cash conversion cyde (CCC) In general, firms prefera , What is the length of Red Hamster Manufacturing's cash conversion cycle (CCC)? 40.68 days 37.29 days 32.21 days 1833.90 days In general forms prefero cc The management at Red Harnster Manufacturing wants to continue its internal discussions regarding its cash management. One of the finance team members presents the following case to be cohorts On average, it takes from the time a sale is mede until the time cash is collected from customers after the 30.12 days Red Hamster Manual bn customer credit when it buys raw materials from its suppliers. On average, it takes fimm purchases matel 23,27 days bends cash to its suppliers. The length of Red Hamster Manufacturing's cash conversion cyde (CC) In general, firms pre 27.38 days What is the length of 26.01 days Manufacturing's cash conversion cycle (CCC)? 0 40.68 days 132 29 days 32.21 doys 33.90 days In general times preferal Wood The management at Red Hamster Manufacturing wants to continue its internal discussions regarding its casty management. One of the finance team members presents the following case to her cohorts On average, it takes from the time a sale is made until the time cash is collected from customers after the Red Hamster Manufacturing relies on customer credit when it buys raw materials from its suppliers. On average, it takes firm purchases materials before it sends cash to its suppliers. The length of Red Hamster Manufacturing's cash conversio 59.96 days In general, firms prefer a 46.93 days What is the length of Red Hamster Manufacturing's cash conversion cycle (CCC)? 52.14 days 40.68 days 54.75 days 37.29 days 132 21 days 33.90 days In general firms prefers Oce The management at Red Homster Manufacturing wants to continue its internal discussions regarding its cash management One of the finance team members presents the following case to her cohorts: On average, it takes from the time a sale is made until the time cash is collected from customers after the Red Hamster Manufacturing relies on customer credit when it buys raw materials from its suppliers. On average, it takes firm purchases materials before it sends cash to its suppliers. The length of Red Harnister Manufacturing's cash conversion cyce (CCC) is In general, firms prefer a , 28.82 What is the length of Red Hamster Manufacturing's cash conversion cyde (CCC)? 33.90 40.68 days 37.29 days 32.21 days 33.90 days In general is prefera CCO The management at Red Hamster Manufacturing wants to continue its internal discussions regarding its cash management. One of the finance team members presents the following case to her cohorts On average, it takes from the time a sale is made until the time cash is collected from customers after the Red Hamster Manufacturing relies on customer credit when it buys raw materials from its suppliers. On average, it takes firm purchases materials before it sends cash to its suppliers. The length of Red Hamster Manufacturing's cast conversion cyde (CCC) In general, firms prefera What is the length of Red longer Manufacturing's cash conversion cycle (CCC)? shorter 40,68 days 97.29 days 832 21 days 33.90 days In general firms prefera The management at Red Hamster Manufacturing wants to continue its internal discussions regarding is cash management. One of the finance team members oresents the following case to her cohorts 58.66 days On average, it takes from the time a sale is made until the time cash is collected from customers after the Red Hamster Manufacturing relies on customer credit when it buys raw materials from its suppliers. On average, takes firm purchases materials before it sends cash to its suppliers. The length of Red Harnster Manufacturing's cash conversion des MCCC. In general, firms prefer a What is the length of Red Hamster Manufacturing's cash conversion cycle (CCC)? 40.68 days @ 37 29 days 132.21 IVS 33.90 days In general, rimis pceler CCO The management at Red longer anufacturing wants to continue its internal discussions regarding its cost management. One of the finance team members presents the fol shorter le to her cohorts The management at Red longer anufacturing wants to continue its internal discussions regarding its cash management. One of the finance team members presents the fol shorter le to her cohorts: Case In Discussion Green Melon Electronics Company's management plans to finance its operations with bank loans that will be repaid as soon as cash is available. The company's management expects that it will take 60 days to manufacture and sell its products and 50 days to receive payment from its customers. Green Melon Electronics Company's CFO has told the rest of the management team that they should expect the length of the bank loans to be approximately 110 days. Which of the following responses to the CFO's statement is most accurate? The CFO's approximation or the length of the bank loans should be accurate, because it will take 110 days for the company to manufacture, sell, and collect cash for its goods. All these things must occur for the company to be able to repay its loans from the bank. The CFO is not taking into account the amount of time the company has to pay its supplers. Generally, there is a certain length of time between the purchase of materials and labor and the payment of cash for them. The CFO can reduce the estimated length of the bank loan by this amount of time. is it possible for a firm to have a negative CC? No Yes