Question
You have the following information about an industrial company, the company collects receivables during an average period is 88 days and the period of inventory
You have the following information about an industrial company, the company collects receivables during an average period is 88 days and the period of inventory is 120 days, and it pays its creditors within 110 days and spends an amount of 30 million riyals annually on its operating cycle, and if the cost of its investments is 12 %. Suppose you are the financial advisor of this company and they ask you to calculate the following: a . Company's cash cycle NS . Daily cash expenses NS . The cost of its investment Dr . If the company reduces the average storage period to 115 days, calculate how much cash savings it will make as a result.
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