Question
Bully Corporation purchases raw materials on July 1. It converts the raw materials into inventory by September 30. However, Bully pays for the materials on
Bully Corporation purchases raw materials on July 1. It converts the raw materials into inventory by September 30. However, Bully pays for the materials on July 20. On October 31, it sells the finished goods inventory. Then, the firm collects cash from the sale 1 month later on November 30. If this sequence accurately represents the average working capital cycle, what is the firm's cash conversion cycle in days? * 92 days. 133 days. 123 days. 153 days.
Operating ratios measure a firm's ability to repay its obligations. * TRUE FALSE
For Raw Material L12, a company maintains a safety stock of 5,000 pounds. Its average inventory (taking into account the safety stock) is 12,000 pounds. What is the apparent order quantity? * 18,000 lbs. 6,000 lbs. 14,000 lbs. 24,000 lbs
A ratio is most meaningful when the numerator and denominator are related to each other. * TRUE FALSE
The only ratio that measures return on investment is the return on common equity. * TRUE FALSE
If the pro forma balance sheet shows that total assets must increase by P400,000 while retaining a debt-equity ratio of .75 then: * debt must increase by P300,000. equity must increase by the full P400,000. debt must increase by P171,428. equity must increase by P100,000.
Jumpdisk Company writes checks averaging $15,000 a day, and it takes five days for these checks to clear. The firm also receives checks in the amount of $17,000 per day, but the firm loses three days while its receipts are being deposited and cleared. What is the firm's net float in dollars? * $126,000 $ 75,000 $ 32,000 $ 24,000
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