All Related Questions of Cash Conversion Cycle

Q: Primrose Corp has $15 million of sales, $2 million

Primrose Corp has $15 million of sales, $2 million of inventories, $3 million of receivables, and $1 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with b...

Q: Define cash conversion cycle (CCC) and explain why, holding

Define cash conversion cycle (CCC) and explain why, holding other things constant, a firm’s profitability would increase if it lowered its CCC.

Q: Prestopino Corporation produces motorcycle batteries. Prestopino turns out 1,500

Prestopino Corporation produces motorcycle batteries. Prestopino turns out 1,500 batteries a day at a cost of $6 per battery for materials and labor. It takes the firm 22 days to convert raw materials...

Q: Use the financial statements supplied below and on the next page for

Use the financial statements supplied below and on the next page for International Motor Corporation (IMC) to answer the following questions: a. Calculate the cash conversion cycle for IMC for both 20...

Q: The questions in this exercise are based on Dell, Inc.

The questions in this exercise are based on Dell, Inc. To answer the questions, you will need to download Dell’s 2005 Form 10-K by going to www.sec.gov/edgar/searchedgar/companysearch.html. Input CIK...

Q: Use the Allstott 2012 income statement that follows and the balance sheet

Use the Allstott 2012 income statement that follows and the balance sheet from Short Exercise 13-6 to compute the following: a. Allstott’s rate of inventory turnover and days inve...

Q: The financial statements of Family News, Inc., include the following

The financial statements of Family News, Inc., include the following items: Requirements 1. Compute the following ratios for 2012 and 2011: a. Current ratio b. Quick (acid test) ratio c. Inventory t...

Q: The financial statements of Alliance News, Inc., include the following

The financial statements of Alliance News, Inc., include the following items: Requirements 1. Compute the following ratios for 2012 and 2011: a. Current ratio b. Quick (acid test) ratio c. Inventory...

Q: Comparative financial statement data of Hamden Optical Mart follow:

Comparative financial statement data of Hamden Optical Mart follow: Other information: 1. Market price of Hamden common stock: $102.17 at December 31, 2012, and $77.01 at December 31, 2011 2. Common...

Q: Comparative financial statement data of Panfield Optical Mart follow:

Comparative financial statement data of Panfield Optical Mart follow: Other information: 1. Market price of Panfield common stock: $94.38 at December 31, 2012, and $85.67 at December 31, 2011 2. Com...

Q: Use the data for Consolidated Services from E11-15A.

Use the data for Consolidated Services from E11-15A. Data from E11-15A Requirements 1. Calculate the cash conversion cycle for Consolidated Services. Round all calculations to two decimal places. As...

Q: Use the data for Amalgamated Services from E11-24B.

Use the data for Amalgamated Services from E11-24B. Data from E11-24B. Additional data follows: a. Acquisition of fixed assets totaled $115,000. Of this amount, $85,000 was paid in cash and a $30,00...

Q: Let’s look at Dick’s Sporting Goods (Dick’s) some more.

Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. How much cash does Dick’s have? What are the sources and uses of Dick’s cash? Return to Dick’s Annual Report and look at Dic...

Q: A company’s cash conversion cycle increased from 55 days in year 1

A company’s cash conversion cycle increased from 55 days in year 1 to 68 days in year 3. What are the implications of this increase? What do you think happens to the cash conversion cycles of companie...

Q: Karen Johnson, CFO for Raucous Roasters (RR), a specialty

Karen Johnson, CFO for Raucous Roasters (RR), a specialty coffee manufacturer, is rethinking her company’s working capital policy in light of a recent scare she faced when RRâ&...

Q: What is the cash conversion cycle (CCC)? Why it better

What is the cash conversion cycle (CCC)? Why it better, other things held constant, to have a shorter rather than a longer CCC? Suppose you know a company’s annual sales, average inventories, average...

Q: How does credit policy affect the cash conversion cycle as discussed in

How does credit policy affect the cash conversion cycle as discussed in the last chapter?

Q: The questions in this exercise are based on Dell, Inc.

The questions in this exercise are based on Dell, Inc. To answer the questions, you will needto download Dell’s Form 10-K for the fiscal year ended January 28, 2005 by going to www.sec.gov/edgar/searc...

Q: Describe the cash conversion cycle (C3).

Describe the cash conversion cycle (C3).

Q: What are the three components of the cash conversion cycle (C3

What are the three components of the cash conversion cycle (C3)? How is each component calculated?

Q: Safety-First, Inc. makes portable ladders that can be

Safety-First, Inc. makes portable ladders that can be used to exit second floor levels of homes in the event of fire. Each ladder consists of fire resistant rope and high strength plastic steps. A l...

Q: Cash Conversion Cycle] Two years of financial statement data for the

Cash Conversion Cycle] Two years of financial statement data for the Munich Export Corporation are shown below. MUNICH EXPORTS CORPORATION Balance Sheet 2015 2016 Cash...

Q: Castillo Products Company improved its operations from a net loss in 2015

Castillo Products Company improved its operations from a net loss in 2015 to a net profit in 2016. While the founders, Cindy and Rob Castillo, are happy about these developments, they are concerned w...

Q: Kaj Rasmussen founded Scandi Home Furnishings as a corporation during mid-

Kaj Rasmussen founded Scandi Home Furnishings as a corporation during mid-2013. Sales during the first full year (2014) of operation reached $1.3 million. Sales increased by 15 percent in 2015 and a...

Q: Using the ratios and information given for Wal-Mart Stores,

Using the ratios and information given for Wal-Mart Stores, Inc., a retailer, analyze the short-term liquidity and operating efficiency of the firm as of January 31, 2014.

Q: Following are the financial statements for the Chenhai Manufacturing Corporation for 2015

Following are the financial statements for the Chenhai Manufacturing Corporation for 2015 and 2016. The venture is in financial distress and hopes to turn around its financial performance in the near...

Q: The following table reports the operating cycle, cash conversion cycle,

The following table reports the operating cycle, cash conversion cycle, and current ratio for three apparel retailers all having year-ends at January 31, 2015. Aeropostale, which was originally owned...

Q: Compute the cost of the trade credit terms in Problem 15-

Compute the cost of the trade credit terms in Problem 15-3 using the compounding formula, or effective annual rate. Data from Problem 15-3: Historical data for the sales, accounts receivable, invento...

Q: Historical data for the sales, accounts receivable, inventories, and

Historical data for the sales, accounts receivable, inventories, and accounts payable for the Crimson Mfg. Company follow: a. Calculate Crimson’s days of sales outstanding and days...

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: Wolfgang’s Masonry management estimates that it takes the company 27 days on

Wolfgang’s Masonry management estimates that it takes the company 27 days on average to pay its suppliers. Management also knows that the company has days’ sales in inventory of 64 days and days’ sale...

Q: Last year Perpetual Plastics Company took an average of 46 days to

Last year Perpetual Plastics Company took an average of 46 days to pay suppliers and 38 days to collect its receivables. The company’s average days’ sales in inventory was 52 days. What was Perpetual’...

Q: Sliver Computing Inc., reported the following balance sheet information for the

Sliver Computing Inc., reported the following balance sheet information for the last fiscal year. Sliver Computing also reported cost of goods sold of $291,240 for the same period. Internal auditors s...

Q: Explain what a negative cash conversion cycle means?

Explain what a negative cash conversion cycle means?

Q: The financial statements of Carver News, Inc., include the following

The financial statements of Carver News, Inc., include the following items: Requirements 1. Using Exhibit 13-8 as a model, compute the following ratios for 2016 and 2015: a. Current...

Q: Irvin Furniture Company has requested that you determine whether the company’s ability

Irvin Furniture Company has requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2016. To ans...

Q: Use the Under Armour, Inc., consolidated financial statements in Appendix

Use the Under Armour, Inc., consolidated financial statements in Appendix B and online in the filings section of http://www.sec.gov to address the following questions. Requirements 1. Compute ratios...

Q: Comparative financial statement data of Sanfield Optical Mart follow:

Comparative financial statement data of Sanfield Optical Mart follow: Other information: 1. Market price of Sanfield common stock: $89.38 at December 31, 2016, and $8...

Q: Comparative financial statement data of Arch Optical Mart follow:

Comparative financial statement data of Arch Optical Mart follow: Other information: 1. Market price of Arch common stock: $88.17 at December 31, 2016, and $77.01 at December 31, 20...

Q: Use the Gagnon 2016 income statement that follows and the balance sheet

Use the Gagnon 2016 income statement that follows and the balance sheet from S13-6 to compute the following: a. Gagnon, Inc.’s, rate of inventory turnover and daysâ€...

Q: The financial statements of Adventure News, Inc., include the following

The financial statements of Adventure News, Inc., include the following items: Requirements 1. Using Exhibit 13-8 as a model, compute the following ratios for 2016 and 2015: a. Curr...

Q: DuBois Furniture Company has requested that you determine whether the company’s ability

DuBois Furniture Company has requested that you determine whether the company’s ability to pay its current liabilities and long-term debts improved or deteriorated during 2016. To an...

Q: 1. Determine Cranston’s average production cycles for 2013 and 2014.

1. Determine Cranston’s average production cycles for 2013 and 2014. 2. Determine Cranston’s average collection cycles for 2013 and 2014. Assume that all sales are credit sales. 3. Determine Cranston’...

Q: Stewart and Company currently has a production cycle of forty days,

Stewart and Company currently has a production cycle of forty days, a collection cycle of twenty days, and a payment cycle of fifteen days. What are Stewart’s current business operating cycle and cash...

Q: Define and describe the difference between the operating cycle and cash conversion

Define and describe the difference between the operating cycle and cash conversion cycle for a typical manufacturing company.

Q: The Butler-Huron Company’s balance sheet and income statement for last

The Butler-Huron Company’s balance sheet and income statement for last year are as follows: *Assume that all sales are credit sales and that average accounts receivable are the sam...

Q: Network Solutions just introduced a new, fully automated manufacturing plant that

Network Solutions just introduced a new, fully automated manufacturing plant that produces 2,000 wireless routers per day with a materials cost of $50 per router and no other costs. The average number...

Q: Garrett Industries turns over its inventory 6 times each year; it

Garrett Industries turns over its inventory 6 times each year; it has an average collection period of 45 days and an average payment period of 30 days. The firm’s annual sales are $3 million. Assume t...

Q: Explain the difference between the operating cycle (OC) and the

Explain the difference between the operating cycle (OC) and the cash conversion cycle (CCC).

Q: Manitoba Services is considering undertaking a new order that would cause its

Manitoba Services is considering undertaking a new order that would cause its average days of revenues in payables (ADRP) to decrease from 58 days to 48 days, while its average collection period (ACP)...

Q: Determine the operating cycle and cash conversion cycle for a company with

Determine the operating cycle and cash conversion cycle for a company with inventory turnover of 6.25 times per year, receivables turnover of 8 times per year, and an average days of revenues in payab...

Q: MB Corporation has a receivables turnover of 10, an inventory turnover

MB Corporation has a receivables turnover of 10, an inventory turnover of 15, and a payables turnover of 5. Calculate its cash conversion cycle. What does a negative cash conversion cycle tell you abo...

Q: Calculate the cash conversion cycle (CCC) for the company examined

Calculate the cash conversion cycle (CCC) for the company examined in questions 4 to 6. Round to the nearest day.

Q: What is the cash conversion cycle (CCC)? Why is it

What is the cash conversion cycle (CCC)? Why is it better, other things held constant, to have a shorter rather than a longer CCC? Suppose you know a company’s annual sales, average inventories, avera...

Q: Use the financial statements supplied on the next page for International Motor

Use the financial statements supplied on the next page for International Motor Corporation (IMC) to answer the following questions. a. Calculate the cash conversion cycle for IMC for both 2015 and 201...

Q: The Greek Connection had sales of $32 million in 2015,

The Greek Connection had sales of $32 million in 2015, and a cost of goods sold of $20 million. A simplified balance sheet for the firm appears below: a. Calculate The Greek Connectionâ€&...

Q: 1. What is the operating cycle? a. Usually

1. What is the operating cycle? a. Usually one year for a typical manufacturing firm b. The period of time to produce an item and place it in inventory c. Time to produce a good or service and coll...

Q: Genatron Manufacturing (from problem 8) is considering changing its credit

Genatron Manufacturing (from problem 8) is considering changing its credit standards. Analysis shows that sales may fall 5 percent from 2017 levels with no bad debts from the change in sales. The cost...

Q: Given Robinson’s 2016 and 2017 financial information presented in problems 3 and

Given Robinson’s 2016 and 2017 financial information presented in problems 3 and 4, a) Compute its operating and cash conversion cycle in each year. b) What was Robinson’s net investment in working...

Q: Robinson expects its 2018 sales and cost of goods sold to grow

Robinson expects its 2018 sales and cost of goods sold to grow by 5 percent over their 2017 levels. a) What will be the effect on its levels of receivables, inventories, and payments if the component...

Q: Robinson expects its 2018 sales and cost of goods sold to grow

Robinson expects its 2018 sales and cost of goods sold to grow by 20 percent over their 2017 levels. a) What will be the effect on its levels of receivables, inventories, and payments if the component...

Q: Financial statements for the Genatron Manufacturing Corporation for the years 2016 and

Financial statements for the Genatron Manufacturing Corporation for the years 2016 and 2017 are listed in the text. Calculate Genatron’s operating cycle and cash conversion cycle for 2016 and 2017. Wh...

Q: Explain how the cash conversion cycle differs from the operating cycle.

Explain how the cash conversion cycle differs from the operating cycle.

Q: Describe how the length of the cash conversion cycle is determined.

Describe how the length of the cash conversion cycle is determined.

Q: In addition to the information from S12-6, assume that

In addition to the information from S12-6, assume that cash on the 2018 balance sheet was $14,000 and current liabilities totaled $25,000. Compute the following ratios for 2018: 1. Current ratio 2. Qu...

Q: Let’s consider Dick’s Sporting Goods (Dick’s) again. Think about

Let’s consider Dick’s Sporting Goods (Dick’s) again. Think about Dick’s. How much cash does Dick’s have? What are the sources and uses of Dick’s cash? Return to Dick’s Annual Report and look at the co...

Q: Two years of financial statement data for the Munich Export Corporation are

Two years of financial statement data for the Munich Export Corporation are shown below. A. Calculate the inventory-to-sale, sale-to-cash, and purchase-to-payment conversion periods for Munich Exports...

Q: Castillo Products Company, described below, improved its operations from a

Castillo Products Company, described below, improved its operations from a net loss in 2018 to a net profit in 2019. While the founders, Cindy and Rob Castillo, are happy about these developments, the...

Q: Following are the financial statements for the Chenhai Manufacturing Corporation for 2018

Following are the financial statements for the Chenhai Manufacturing Corporation for 2018 and 2019. The venture is in financial distress and hopes to turn around its financial performance in the near...

Q: Safety-First, Inc., makes portable ladders that can be

Safety-First, Inc., makes portable ladders that can be used to exit second-floor levels of homes in the event of fire. Each ladder consists of fire-resistant rope and high-strength plastic steps. A li...

Q: Kaj Rasmussen founded Scandi Home Furnishings as a corporation during mid-

Kaj Rasmussen founded Scandi Home Furnishings as a corporation during mid-2016. Sales during the first full year (2017) of operation reached $1.3 million. Sales increased by 15 percent in 2018 and ano...

Q: The financial statements of Explorer News, Inc., include the following

The financial statements of Explorer News, Inc., include the following items: Requirements: 1. Calculate the following ratios for 2018 and 2017. When calculating days, round your answer to the near...

Q: The financial statements of Big City News, Inc., include the

The financial statements of Big City News, Inc., include the following items: Requirements: 1. Calculate the following ratios for 2018 and 2017. When calculating days, round your answer to the neares...

Q: Comparative financial statement data of Hamden Optical Mart follow: /

Comparative financial statement data of Hamden Optical Mart follow: Other information: 1. Market price of Hamden Optical Mart common stock: $48.15 at December 31, 2018, and $39.96 at December 31, 2...

Q: Comparative financial statement data of Stow Optical Mart follow: /

Comparative financial statement data of Stow Optical Mart follow: Other information: 1. Market price of Stow Optical Mart common stock: $122.91 at December 31, 2018, and $165.75 at December 31, 2017...

Q: The Metro 2018 income statement follows. / Use

The Metro 2018 income statement follows. Use the preceding income statement and the balance sheet from S12-6 to calculate the following: a. Metro’s rate of inventory turnover and da...

Q: To follow are The Cheesecake Factory Incorporated’s financial statements from its 2016

To follow are The Cheesecake Factory Incorporated’s financial statements from its 2016 Form 10-K. The preceding financial statements have been condensed and adapted for educational...

Q: Information for Google follows. / Required 1

Information for Google follows. Required 1. Compute Google’s cash conversion cycle for both the current and prior years. 2. Did Google become more effective at managing cash in the...

Q: Current year information for Samsung and Google follows. /

Current year information for Samsung and Google follows. Required 1. Compute the cash conversion cycle for both Samsung and Google for the current year. 2. Which company, Samsung or Google, was more...

Q: A manufacturer reports the data below. (1) Compute the

A manufacturer reports the data below. (1) Compute the number of days in the cash conversion cycle for each year. (2) Did the company manage cash more effectively in the current year?

Q: A manufacturer reports the data below. (1) Compute the

A manufacturer reports the data below. (1) Compute the number of days in the cash conversion cycle. (2) Is the company more efficient at managing cash than its competitor who has a cash conversion cyc...

Q: Santana Rey’s two departments, Computer Consulting Services and Computer Workstation Furniture

Santana Rey’s two departments, Computer Consulting Services and Computer Workstation Furniture Manufacturing, have each been profitable for Business Solutions. Santana has heard of t...

Q: (1) Use the information below to compute the days in

(1) Use the information below to compute the days in the cash conversion cycle for each company. (2) Which company is more effective at managing cash based on this measure?

Q: Managing an integrated supply chain (ISC) is highly dependent on

Managing an integrated supply chain (ISC) is highly dependent on quality management practices. IBM, which considers the effective and efficient operation of its supply chain as a key factor in improvi...

Q: Using the data in Problem 38, assume the operating manager reduces

Using the data in Problem 38, assume the operating manager reduces total average inventory on-hand by 21 percent by using better operations and supply chain methods. What is the revised cash-to-cash c...