Question
Daphna Corporation has the following data, in thousands. Assume a 365-day year. Annual sales = 45,000 Annual cost of goods sold = 31,500 Average Inventory
Daphna Corporation has the following data, in thousands. Assume a 365-day year.
Annual sales = 45,000
Annual cost of goods sold = 31,500
Average Inventory = 4,000
Average Accounts receivable = 2,000
Average Accounts payable = 2,400
Benchmark Cash Cycle (industry average) 52 days
Instructions:
1. Calculate the following:
a.Inventory period
b.Receivables period
c. Payables period
d.Operating cycle
e.Cash cycle
2. Answer the following:
a.How does the firm's cash cycle compare to its competitors? Is the firm performing better or worse than its competitors?
b.Explain some of the collection and disbursement techniques used by the companies to manage cash.
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