*Please do not Excel. Please show detail work including formulas. 1) The Flamingo Corporation is...
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*Please do not Excel. Please show detail work including formulas.
1) The Flamingo Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash flow cycle. Last year, Flamingos sales (all on credit) were $180,000 and its cost of goods sold were 85 percent of sales. Inventory was turned over eight times during the year, and the accounts receivable turnover was 10. Flamingos payables deferral period is 30 days.
- Calculate Flamingos cash conversion cycle
- Compute the average balances in accounts receivable, accounts payable and inventory
Identify your final answer with a proper label and double underline.
Begin by identifying what you know:
Sales =
Cost of goods sold =
Inventory turnover =
Accounts receivable turnover =
DPO =
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