Question
In: Finance
(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
Solutions
Expert Solution
Calculation of each part is given below
Following shows the working
jeff jeffy answered 2 years agoRelated Solutions
Cash $30,000 Accounts receivable 63,800 Accounts payable 52,500 Short-term notes payable 11,000 Inventories 66,000 Gross fixed...
Cash
$30,000
Accounts receivable
63,800
Accounts payable
52,500
Short-term notes payable
11,000
Inventories
66,000
Gross fixed assets
1,061,000
Accumulated depreciation
86,000
Long-term debt
210,000
Common stock
480,000
Other assets
25,000
Retained earnings
?
Complete the part of the common-sized balance sheet
below. (Round to one decimal place.
NOTE:
Input the Accumulated depreciation account as a negative
value.)
Common-sized Balance Sheet
ASSETS
Cash
$
30,000
%
Accounts receivable
63,800
Inventories
66,000
Total current assets
$
159,800
%
Gross fixed assets
$...
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What is Parramore's cash conversion cycle (CCC)? Do not round
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Its cost of goods sold is 70% of sales, and it finances working
capital with bank loans at an 6% rate. Assume 365 days in year for
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capital with bank loans at an 7% rate. Assume 365 days in year for
your calculations. Do not round intermediate steps.
What is Parramore's cash conversion cycle (CCC)? Do not round
intermediate calculations. Round your answer to two decimal
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inventories, $3 million of receivables, and $2 million of payables.
Its cost of goods sold is 65% of sales, and it finances working
capital with bank loans at an 6% rate. Assume 365 days in year for
your calculations. Do not round intermediate steps.
What is Parramore's cash conversion cycle (CCC)? Do not round
intermediate calculations. Round your answer to two decimal
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inventories, $4 million of receivables, and $2 million of payables.
Its cost of goods sold is 70% of sales, and it finances working
capital with bank loans at an 6% rate. Assume 365 days in year for
your calculations. Do not round intermediate steps.
What is Parramore's cash conversion cycle (CCC)? Do not round
intermediate calculations. Round your answer to two decimal
places.
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