2. Advanced Medical Technology is a new, rapidly growing firm that produces specialized medical instruments. They sell...

60.1K

Verified Solution

Question

Accounting

2. Advanced Medical Technology is a new,rapidly growing firm that produces specialized medical instruments.They sell to hospitals and other surgical units, and a substantialportion of their sales are to foreign governments. Typical payableterms in the industry are payment with 30 days.
They recently reported the following financial information:
           Sales                           $225,000
           Cost of sales                180,000
           Inventory                         33,000
           Accounts receivable        72,000
           Accounts payable           30,000
           # of Days per year              365

Compute the additional working capital financing period forAdvanced Medical.


Comment on their working capital financing period.  What actions might Advanced take to improve their situation?

Answer & Explanation Solved by verified expert

4.1 Ratings (661 Votes)

1 Days sales outstanding DSO 72000365225000 117 days Days inventory outstanding DIO 33000365180000 67 days Days payables outstanding DPO 30000365180000 61 days WC financing See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member