Parmorramore corp has 12$ million of sales, 3$ million of inventories, 2$ million of recviables, aand...

Parmorramore corp has 12$ million of sales, 3$ million of inventories, 2$ million of recviables, aand 2.5$ million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at 7% rate. Assume 365 days in year fo calculations. 1. What is parramores cash conversion cycle? 2. If parramore could lower its inventoires and reciables by 11% each and increase its payables by 11% all wihtout affecting sales or cogs what would be the new CCC? 3. How much cash would be freed up if parramore could lower its inventories and reciables by 11% and increase paybles by 11%? 4. by how much pretax profits change if parramore could lower its inventories and reciavbles by 11% each and increase its payabes by 11%?

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jeff jeffy answered 6 days ago

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