I will need to show all work. Pretty Lady Cosmetic Products has an average production process time
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I will need to show all work.
Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept on hand for an average of fifteen days before they are sold. Accounts receivable are outstanding an average of 35-days, and the firm receives 40 days of credit on its purchases from suppliers.
- Estimate the average length of time of the firms short term operating cycle. How often would the cycle turn over in a year?
- Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average investment in accounts receivable, inventories, and accounts payable. What would be the net financing need considering only these three accounts?
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