Question
American Products is concerned about managing cash efficiently. On the average, inventories have an age of 8484 days, and accounts receivable are collected in 3939
American Products is concerned about managing cash efficiently. On the average, inventories have an age of
8484
days, and accounts receivable are collected in
3939
days. Accounts payable are paid approximately
3333
days after they arise. The firm has annual sales of about
$3737
million. Cost of goods sold are
$2020
million, and purchases are
$1616
million.
a.Calculate the firm's operating
cycle.
b.Calculate the firm's cash conversion
cycle.
c.Calculate the amount of resources needed to support the firm's cash conversion cycle.
d.Discuss how management might be able to reduce the cash conversion cycle.
a. American Products' operating cycle, OC, is
nothing
days.(Round to the nearest whole number.)
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