the conversion cycle period is 24 days and the operating period is 23 days for Company...

the conversion cycle period is 24 days and the operating period is 23 days for Company tiger another company (m) has 57 days for operating period and 69 days for conversion cash period what are the differences and similarities and compare it

Expert Solution

operating cycle :

An operating cycle represents the amount of time it takes a company to acquire inventory, sell that inventory, and receive cash from its customers in exchange for the inventory sold.

cash conversion cycle :

cash cycle represents the amount of time it takes a company to convert resources to cash.

Similarities and differences :

Operating Cycle and Cash Conversion Cycle are quite similar with only one additional item added on to the Operating Cycle formula in order to get the Cash Conversion Cycle formula .

operating cycle = Days of inventory outstanding/ Day sales outstanding

Cash conversion cycle = operating cycle - Days payable outstanding .

Comparsion:

Both formulas are liquidity measures and can also be used as a gauge for the operational and financial effectiveness of a company.

Note : Detailed formuals are provided in attachment.

ekkarill92 answered 2 years ago

Company Inventory Conversion Period, days Average Collection Period, days Payables Deferral Period, days Cash Conversion Cycle,...

Company Inventory Conversion Period, days Average Collection Period, days Payables Deferral Period, days Cash Conversion Cycle, days Adidas 112 27 57 82 Puma 107 18 49 Nike 128 20 43 105 Under Armor 89 24 21 1)calculate CCC for Puma and UA. 2)pick any 1 company of the 4: how its operational liquidity stands versus competitors (other 3 firms)? how can this company improve its liquidity? What are possible risks/limitations to your proposed changes?

CASH CONVERSION CYCLE Zane Corporation has an inventory conversion period of 52 days, an average collection...

CASH CONVERSION CYCLE Zane Corporation has an inventory conversion period of 52 days, an average collection period of 37 days, and a payables deferral period of 25 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 $3,427,440 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer...

If a company has a cash-conversion cycle of 15 days, an average age of inventory of...

If a company has a cash-conversion cycle of 15 days, an average age of inventory of 40 days and an average payment period of 60 days, calculate the average collection period.

The operating cycle for: Amazon = 85 days Walmart = 60 days The cash cycle for:...

The operating cycle for: Amazon = 85 days Walmart = 60 days The cash cycle for: Amazon =95 days Walmart =15 days Q1/ What does the operating and cash cycle tell us about each company? Which company is doing better with their working capital management? Q2/ What recommendations would you make to the other company(s) to improve its working capital management?

Calvani, Inc., has a cash cycle of 44.5 days, an operating cycle of 65 days, and...

Calvani, Inc., has a cash cycle of 44.5 days, an operating cycle of 65 days, and an inventory period of 28 days. The company reported cost of goods sold in the amount of $344,000, and credit sales were $567,000. What is the company’s average balance in accounts payable and accounts receivable? Average accounts payable $ _______ Average accounts receivable $______

Betty's Bagels has a cash cycle of 15 days, an operating cycle of 32 days, and...

Betty's Bagels has a cash cycle of 15 days, an operating cycle of 32 days, and an inventory period of 1.5 days. The company reported cost of goods sold in the amount of $102,000, and credit sales were $206,000. What is the company's average balance in accounts payable? Select one: a. $18,414.36 b. $4,843.84 c. $4,750.65 d. $21,918.00 e. $9,594.52

Calculate the operating cycle and the cash conversion cycle of "Realidad SA". Half of the answer...

Calculate the operating cycle and the cash conversion cycle of "Realidad SA". Half of the answer is the interpretation of it. 2020 2019 Customers $ 153,000 $ 197,000 Suppliers $ 182,000 $ 110,000 Purchases $ 321,000 $ 255,000 Inventories $ 101,000 $ 79,000 Sales $ 650,000 $ 528,000 Sales are 80% on credit and 20% in cash. Purchases are 60% on credit and 40% in cash Cost of sales is 40% of sales for each period

The cash cycle is equal to the: inventory period minus the accounts payable period. operating cycle...

The cash cycle is equal to the: inventory period minus the accounts payable period. operating cycle plus the accounts payable period. operating cycle minus the accounts receivable period. accounts receivable period minus the accounts payable period plus the inventory period. inventory period minus the accounts receivable period minus the accounts payable period.

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...

Zane Corporation has an inventory conversion period of 63 days, an average collection period of 33...

Zane Corporation has an inventory conversion period of 63 days, an average collection period of 33 days, and a payables deferral period of 37 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 $2,679,070 and all sales are on credit, what is the investment in accounts receivable? Round your answer to the nearest cent. Do not round intermediate...

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