2.The Robinson Company has the following current assets and current liabilities
ID: 2347691 • Letter: 2
Question
2.The Robinson Company has the following current assets andcurrent liabilities for these two years:
2010 2011
Cash and marketable securities $ 50,000 $ 50,000
Accounts receivable 300,000 350,000
Inventories 350,000 500,000
Total current assets $700,000 $900,000
Accounts payable $200,000 $250,000
Bank loan 0 150,000
Accruals 150,000 200,000
Total current liabilities $350,000 $600,000
4.Suppose the Robinson Company had a cost of goods sold of
$1,000,000 in 2010 and $1,200,000 in 2011.
my question:Given Robinson
Explanation / Answer
DearCustomer The cash conversion cycle is way for a business to figure out how long it takes for it to convert its operating activities in to cash flow (i.e., from the day it makes a sale, the average length of time it takes for it to see the money, as it were). The formula is: Cash conversion cycle = invventory days + days accounts rec. + days accounts pay. In your example this is: 180 days+ 90+60+30 It takes it about 6 months to turn activities into cash flow.
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