ABC Corporation has average balances of P1,800,000 in inventory, P2,000,000 in accounts receivable, and P120,000 in accounts payables. Its average daily sales are P100,000. Its average daily purchases are P60,000. No changes in inventory and accounts payable levels are expected. Find the following: 1. Days inventory outstanding 2. Days receivable outstanding 3. Days payable outstanding 4. Cash Conversion Cycle in days 5. Does ABC have an acceptable cash conversion cycle?
ABC Corporation has average balances of P1,800,000 in inventory, P2,000,000 in accounts receivable, and P120,000 in accounts payables. Its average daily sales are P100,000. Its average daily purchases are P60,000. No changes in inventory and accounts payable levels are expected. Find the following: 1. Days inventory outstanding 2. Days receivable outstanding 3. Days payable outstanding 4. Cash Conversion Cycle in days 5. Does ABC have an acceptable cash conversion cycle?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 14BEA: Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000....
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ABC Corporation has average balances of P1,800,000 in inventory, P2,000,000 in accounts receivable, and P120,000 in accounts payables. Its average daily sales are P100,000. Its average daily purchases are P60,000. No changes in inventory and accounts payable levels are expected. Find the following:
1. Days inventory outstanding
2. Days receivable outstanding
3. Days payable outstanding
4. Cash Conversion Cycle in days
5. Does ABC have an acceptable cash conversion cycle?
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