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Cash conversion cycle Fielders Manufacturing Company pays accounts payable two weeks after purchase. The average collection period is 28 days, and the average age of
Cash conversion cycle Fielders Manufacturing Company pays accounts payable two weeks after purchase. The average collection period is 28 days, and the average age of inventory is 45 days. The firm currently has annual sales of about $24 million and purchases of $17 million. The firm is considering a plan that would stretch its accounts payable by 15 days. If the firm pays 12% per year for its resource investment, what annual savings can it realize by this plan? Assume a 360-day year.
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