Inventory turnover = 3 times Accounts receivable turnover = 5 times Accounts payable turnover = 4 times Despite the abov
Posted: Tue Jan 18, 2022 1:02 pm
Inventory turnover = 3 times Accounts receivable turnover = 5
times Accounts payable turnover = 4 times Despite the above ratios
found from the financial statements, ABC company offers its
customers a credit period of 60 days and the company’s supplier
offers it a credit period of 100 days. Industry average inventory
turnover is 4 times. Assume there are 360 days in a year. (a)
Calculate the operating and cash cycle of ABC company. (4 marks)
(b) How can ABC company better manage its working capital
management via its cash cycle management?
times Accounts payable turnover = 4 times Despite the above ratios
found from the financial statements, ABC company offers its
customers a credit period of 60 days and the company’s supplier
offers it a credit period of 100 days. Industry average inventory
turnover is 4 times. Assume there are 360 days in a year. (a)
Calculate the operating and cash cycle of ABC company. (4 marks)
(b) How can ABC company better manage its working capital
management via its cash cycle management?