Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. cash conversion cycle american products is concern

Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories...

90.2K

Verified Solution

Question

Accounting

image
Cash conversion cycle American Products is concerned about managing cash efficiently. On the average, inventories have an age of 83 days, and accounts receivable are collected in 45 days. Accounts payable are paid approximately 26 days after they arise. The firm has annual sales of about $35 million. Cost of goods sold are $20 million, and purchases are $14 million. a. Calculate the firm's operating cycle. b. Calculate the firm's cash conversion cycle. c. Calculate the amount of resources needed to support the firm's cash conversion cycle. d. Discuss how management might be able to reduce the cash conversion cycle. a. American Products' operating cycle, OC, is days. (Round to the nearest whole number.)

Answer & Explanation Solved by verified expert
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

Other questions asked by students