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Company H has the following working capital data: Accounts Receivable: $50,000 Inventory: $30,000 Accounts Payable: $20,000 Sales: $200,000 COGS: $100,000 Requirements: Calculate the Cash Conversion

Company H has the following working capital data:

  • Accounts Receivable: $50,000
  • Inventory: $30,000
  • Accounts Payable: $20,000
  • Sales: $200,000
  • COGS: $100,000

Requirements:

  1. Calculate the Cash Conversion Cycle (CCC).
  2. Determine the Days Sales Outstanding (DSO).
  3. Compute the Inventory Turnover Ratio.
  4. Assess the impact on CCC if the company reduces its inventory by 20%.

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