The Flamingo Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash flow cycle. Last year, Flamingos sales (all on credit) were $180,000, and its cost of goods sold was 85 percent of sales. Inventory was turned over eight times yearly, and the accounts receivable turnover was 10. Flamingos payables deferral period is 30 days. (a) Calculate Flamingos cash conversion cycle (b) Compute the average balances in accounts receivable, accounts payable, and inventory

Stratosphere Wireless is examining its cash conversion cycle. The company expects its cost of goods sold, which equals 80 percent of sales, to equal $480,000 this year. Stratosphere normally turns over inventory 24 times per year, accounts receivable are turned over 15 times per year, and accounts payable turnover is 40. (a) Calculate the cash conversion cycle (b) Calculate the average balances in accounts receivable, accounts payable, and inventory

DQ #2: Which one has the best CCC between the two companies? Explain why their CCC is stronger than the others by discussing which components are stronger.