Question

In: Finance

Zane Corporation has an inventory conversion period of 89 days, an average collection period of 39...

Zane Corporation has an inventory conversion period of 89 days, an average collection period of 39 days, and a payables deferral period of 31 days. Assume 365 days in year for your calculations.

What is the length of the cash conversion cycle? Round your answer to two decimal places.
days
If Zane's annual sales are $3,706,915 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent.
$
How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places.

Expert Solution

a.

The formula to calculate length of cash conversion cycle is shown below:

Cash conversion cycle length is 97 days.

c.

The below expression can be used to calculate accounts receivable amount.

e.

Inventory turnover ratio formula is:

........................(1)

Inventory conversion period formula,

Put this in equation (1)

Inventory turnover is 4.10 times.

jeff jeffy answered 2 years ago

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