Mr. Omar is a Financial Manager of an Omani industrial company located in Muscat that has another three different branches in the Omani Market. The head company besides other branches are dealing with many suppliers and many customers on a daily bases; Mr. Omar wants to evaluate the working capital in all branches for the year 2020 in order to improve the operating performance of the company and make suitable and needed decisions based on results as well as he will need some calculations with regard to the cash conversion cycle of each branch and evaluate different elements in the operating cycle so that will enable him to manage the working capital properly and improve the over whole performance in future.

The Financial statements of the head company in Muscat shows a Net Sales of OMR 3,305,000, Beginning Inventory of OMR 400,000, Ending Inventory OMR 220,000, Average A/R are OMR 410,000, Average A/P are OMR 320,000, the costs of goods sold equals to OMR 1,900,000 and Net purchases are 70% of costs of goods sold.

you are working in the financial department of the company and you have been assigned and two of your colleagues to assist the financial manager with regard of all needed data and information from other different departments such as warehouse, production and sales of all branches that are located in Salalah, Nizwa, Sohar to smooth and accelerate the process of managing the working capital; the following will be some issues you need to solve so you can provide accurate report to the financial manager:

What is the inventory conversion period for all branches knowing that net sales of all branches of the company are OMR 6,000,000 an annual cost of goods sold equals to 40% of net sales and the average inventory are OMR 300,000 and the cash conversion cycle of 75 days?

The financial manager wants to extend the average payable period to 90 days for the coming year as net purchases will be increased to same amount of cost of goods sold for the year 2020, what will be the average accounts payable, considering the head Company located in Muscat?

Nizwa Branch has sales of OMR 1,000,000 and 80% of the sales are on credit. It has a Receivable Turnover of 8 times; what are the Average collection period and the Average Debtors of the firm?

Sohar branch has a number of days of receivable of 60 days and the net sales are OMR 600,000. Calculate the average accounts receivable?

In response to market expectations, the average payment period has been increased from 45 days to 60 days. This would result in?

The longer the firm accounts receivable period, the

a.

Shorter the firm cash conversion cycle

b.

More the delay in the accounts payable period

c.

Shorter the firm inventory period

d.

More delay in the cash collection from debtors