In: Finance
Negus Enterprises has an inventory conversion period of 55 days, an average collection period of 47 days, and a payables deferral period of 29 days. Assume that cost of goods sold is 80% of sales. Assume a 365-day year. Do not round intermediate calculations.
What is the length of the firm's cash conversion cycle? Round your answer to the nearest whole number.
days
If annual sales are $4,854,500 and all sales are on credit, what is the firm's investment in accounts receivable? Round your answer to the nearest dollar.
$
How many times per year does Negus Enterprises turn over its inventory? Round your answer to two decimal places.
a.
b.
Annual sales (all credit) = $4,854,500
Average collection period = 47 days
Firm's investment in Account receivable would be:
c)
Cost of Goods sold (COGS) = 80% of sales = 0.8*4854500 = $3,883,600
Inventory conversion period = 65 days
thus,
Inventory Turnover ratio would be: