Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Amy runs a wholesale grocery business aiming to provide ingredients to local restaurants and hotels in Hunter Region area, and she hires an accountant to

Amy runs a wholesale grocery business aiming to provide ingredients to local restaurants and hotels in Hunter Region area, and she hires an accountant to record the transactions for her business. Recently, the accountant gave her the following information for the business last year.

Sales revenue (all on credit)

$2,980,000

Cost of sales

$1,350,000

Average inventory

$750,000

Average account receivables

$795,000

Average account payables

$521,000

Non-current Assets

$750,000

Required:

  1. Calculate the cash conversion cycle for the business.
  2. What is the asset turnover and return on assets?
  3. Advise Amy if she has a working capital problem in her business. If so, provide two (2) possible suggestions for her to address the issue.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Comprehensive Assurance & Systems Tool An Integrated Practice Set

Authors: Laura R Ingraham, J Greg Jenkins

3rd Edition

0133251969, 9780133251968

More Books

Students also viewed these Accounting questions