Question
DIDO (pty) Ltd is a data management company operating in Palapye Botswana,You are the financial manager for this company and the management has requested you
DIDO (pty) Ltd is a data management company operating in Palapye Botswana,You are the financial manager for this company and the management has requested you to present a paper on short term financial management issues. DIDO (pty)ltd has a permanent funding requirement of P135 000in operating assets and a seasonal funding requirement that vary between P0 and P990 000 and average P101 250. if the company can borrow short term funds at 6.25% and long-term funds at 8% and it can earn 5% on the investment of any surplus balances the company has annual sales of P 10 million,a cost of goods sold of 75%0of sales,and purchases that are 65% of cost of goods sold,the company has an average of age inventory of 60 days,an average collection period of 40 days and an average payment period of 35 days
required: a. calculate the company's cash conversation cycle. b. calculate the annual cost of an aggressive strategy for seasonal funding. c. calculate the annual cost of seasonal funding d. describe any two common techniques of managing inventory
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