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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.

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