The following financial information relates to XYZ Company: Inventory turnover: 5 times Accounts receivable turnover = 6 times Accounts payable turnover = 4 times XYZ gives its customers a credit period of 60 days. XYZ’s suppliers offer a credit period of 90 days. For simplicity, we assume that the year consists of 360 days. a) Calculate the operating and cash cycle for XYZ Company b) Evaluate the implications of the cash cycle for XYZ’s working capital management

The following financial information relates to XYZ Company: Inventory turnover: 5 times Accounts receivable turnover = 6 times Accounts payable turnover = 4 times XYZ gives its customers a credit period of 60 days. XYZ’s suppliers offer a credit period of 90 days. For simplicity, we assume that the year consists of 360 days. a) Calculate the operating and cash cycle for XYZ Company b) Evaluate the implications of the cash cycle for XYZ’s working capital management

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 11P: Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35...

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