Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please answer, very urgent ABC Company Using the following information and assume 365 in a year. Inventory = $100,000 Sales = $500,000 (Assume all credit

Please answer, very urgent

ABC Company

Using the following information and assume 365 in a year.

Inventory = $100,000

Sales = $500,000 (Assume all credit sales)

Accounts receivable = $50,000

Accounts payable = $25,000

Cost of goods sold = $365,000

(a) Calculate the Inventory Period.

(b) Calculate the Accounts Receivable Period.

(c) Calculate the Accounts Payable Period.

(d) What is the Cash Cycle of the firm?

(e) If ABC Company wants to reduce its Cash Cycle, should the company start paying its bills for credit purchases sooner (YES or NO)?Assume that Inventory Period, Accounts Receivable Period and Operating Cycle remain unchanged.

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

Analysis for Financial Management

Authors: Robert C. Higgins

10th edition

007803468X, 978-0078034688

More Books

Students also viewed these Finance questions