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(Cash conversion cycle​) Historical data for the​ firm's sales, accounts​ receivable, inventories, and accounts payable for...

(Cash conversion cycle​) Historical data for the​ firm's sales, accounts​ receivable, inventories, and accounts payable for the Crimson Mfg. Company​ follow:

a. Calculate​ Crimson's days of sales​ outstanding, days of payables​ outstanding, and days of sales in inventory for each of the 5 years. ​(Assume a​ 365-day year. Hint​: Assume that the​ firm's cost of goods sold equals​ 70% of​ sales.) What has Crimson accomplished in its atempts to better manage its investments in account receivable and​ inventory?

b. Calculate​ Crimson's cash conversion cycle for each of the 5 years. Evaluate the​ firm's overall management of its working capital. Assume a​ 365-day year.

a. Calculate​ Crimson's days of sales​ outstanding, days of payables​ outstanding, and days of sales in inventory for each of the 5 years. Assume a​ 365-day year. ​Hint: Assume that the​ firm's cost of goods sold equals​ 70% of sales.

 

2014   2015   2016   2017   2018
Sales 4,379   5,256   7,919   11,625   18,427
Receivables 607   793   1,092   1,381   2,256
Acounts payable  430   660   680   1,502   2,420
Inventories 321   440   653   388   347

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Calculation of each part is given below

Following shows the working

jeff jeffy answered 2 years ago
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