Questions from Corporate Finance

Q: Your boss asks you to compute your company’s cash conversion cycle.

Your boss asks you to compute your company’s cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $26,300, accounts receivable averaged $17,9...

Q: Blackwell Automotive, Inc., reported the following financial information for the

Blackwell Automotive, Inc., reported the following financial information for the last fiscal year. Calculate the firm’s cash conversion cycle and operating cycle?

Q: Elsee, Inc., has net sales of $13 million,

Elsee, Inc., has net sales of $13 million, and 75 percent of these are credit sales. Its cost of goods sold is 65 percent of annual net sales. The firm’s cash conversion cycle is 41.3 days. The invent...

Q: Joanna Handicrafts, Inc., has net sales of $4.

Joanna Handicrafts, Inc., has net sales of $4.23 million with 50 percent being credit sales. Its cost of goods sold is $2.54 million. The firm’s cash conversion cycle is 47.9 days and its operating cy...

Q: Aviva Technology’s operating cycle is 81 days. Its inventory was $

Aviva Technology’s operating cycle is 81 days. Its inventory was $134,000 at the end of last year, and the company had cost of goods sold of $1.1 million. How long does it take Aviva to collect its re...

Q: Premier Corp. has net sales of $812,344,

Premier Corp. has net sales of $812,344, and cost of goods sold equal to 70 percent of net sales. Assume all sales are credit sales. If the firm’s accounts receivable total $113,902 and its operating...

Q: Telecraft Enterprises carries 45 days of inventory in its stores. Last

Telecraft Enterprises carries 45 days of inventory in its stores. Last year Telecraft reported net sales of $1,400,000 and the company had receivables of $325,000 at the end of the year. What is the...

Q: Why can cash investment in inventory be costly?

Why can cash investment in inventory be costly?

Q: Given the data for Telecraft Enterprises in problem 14.21,

Given the data for Telecraft Enterprises in problem 14.21, re-estimate the firm’s operating cycle if days’ sales outstanding decreased to 75 days. For the same level of net sales, what is the implied...

Q: Suppose a biotech company in Boston, Massachusetts, completes an $

Suppose a biotech company in Boston, Massachusetts, completes an $85 million IPO priced to the public at $75 per share. The firm receives $72 per share, and the out-of-pocket expenses are $340,000. Th...