Cash Conversion Cycle Problems 1 Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle Chastain's 2018 sales (all on credit) were $179,000 its cost of goods sold is 80 of sales and it earned a net profit of 7 , or $12,530 It turned over its inventory 4 times during the year, and its DSO was 33 days The firm had fixed assets totaling $30,000 Chastain's payables deferral period is 35 days Assume 365 days in year for your calculations Calculate Chastain's cash conversion cycle Do not round intermediate calculations Round your answer to two decimal places days Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA Do not round intermediate calculations Round your answers to two decimal places Total assets turnover ROA Suppose Chastain's managers believe that the inventory turnover can be raised to 8 4 times What would Chastain's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8 4 for 2018 Do not round intermediate calculations Round your answers to two decimal places Cash conversion cycle days Total assets turnover ROA 2 Zane Corporation has an inventory conversion period of 89 days, an average collection period of 34 days, and a payables deferral period of 27 days Assume 365 days in year for your calculations What is the length of the cash conversion cycle Round your answer to two decimal places days If Zane's annual sales are $2,941,955 and all sales are on credit, what is the investment in accounts receivable Do not round intermediate calculations Round your answer to the nearest cent $ How many times per year does Zane turn over its inventory Assume that the cost of goods sold is 75 of sales Use sales in the numerator to calculate the turnover ratio Do not round intermediate calculations Round your answer to two decimal places times

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Cash Conversion Cycle Problems 1. Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its

Cash Conversion Cycle Problems

1. Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Chastain's 2018 sales (all on credit) were $179,000; its cost of goods sold is 80% of sales; and it earned a net profit of 7%, or $12,530. It turned over its inventory 4 times during the year, and its DSO was 33 days. The firm had fixed assets totaling $30,000. Chastain's payables deferral period is 35 days. Assume 365 days in year for your calculations.

Calculate Chastain's cash conversion cycle. Do not round intermediate calculations. Round your answer to two decimal places. days
Assuming Chastain holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Do not round intermediate calculations. Round your answers to two decimal places.

Total assets turnover

ROA %
Suppose Chastain's managers believe that the inventory turnover can be raised to 8.4 times. What would Chastain's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8.4 for 2018? Do not round intermediate calculations. Round your answers to two decimal places.

Cash conversion cycle days

Total assets turnover

ROA %

2. Zane Corporation has an inventory conversion period of 89 days, an average collection period of 34 days, and a payables deferral period of 27 days. Assume 365 days in year for your calculations.

What is the length of the cash conversion cycle? Round your answer to two decimal places. days
If Zane's annual sales are $2,941,955 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $
How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places. times