Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Now it's time for you to practice what you've learned. Suppose your startup has $15.00 million in sales, $2.00 million of inventories, $3.50 million of

image text in transcribed

Now it's time for you to practice what you've learned. Suppose your startup has $15.00 million in sales, $2.00 million of inventories, $3.50 million of receivables, and $1.10 million of payables. Your cost of goods sold is 50% of sales, and you borrow funds to finance your operations at 8%. The startup's cash conversion cycle is days. Suppose now that you were able to lower your inventories and receivables by 5% and at the same time increase payables by 5%. Given that your sales and costs have not changed, your startup's cash conversion cycle became days. As a result of the 5% change in inventories, receivable and payables, you were able to free up in cash and your pre-tax profits will by

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finance At The Threshold

Authors: Christopher Houghton Budd

1st Edition

0566092115, 978-0566092114

More Books

Students also viewed these Finance questions

Question

3. Comment on how diversity and equality should be managed.

Answered: 1 week ago

Question

describe the legislation that addresses workplace equality

Answered: 1 week ago