Chapter 15 - 13SP

(Cash Conversion Cycle) Historical data for the sales, accounts receivable, inventories, and accounts payable for the Crimson Mfg. Company follow:

	2011	2012	2013	2014	2015
Sales-Net	4,310	5,213	7,944	11,639	18,491
Receivables-Total	617	807	1,089	1,355	2,229
Accounts Payable	425	671	699	1,560	2,465
Inventories-Total	330	440	644	377	350

a. Calculate Crimson's days of sales outstanding and days of sales in inventory for each of the 5 years. Wha has Crimson accomplished in its attempts to better manage its investments in accounts receivable and inventory?

b. Calculate Crimson's cash conversion cycle for each of the 5 years. Evaluate the firm's overall management of its working capital.