Cash conversion cycle PLEASE ROUND CORRECTLY AND FOLLOW THE DIRECTIONS IN THE PR

Question

Cash conversion cycle PLEASE ROUND CORRECTLY AND FOLLOW THE DIRECTIONS IN THE PROBLEM THANKS

Zocco Corporation has an inventory conversion period of 79 days, an average collection period of 40 days, and a payables deferral period of 40 days. Assume 365 days in year for your calculations.

What is the length of the cash conversion cycle? Round your answer to two decimal places.
days

If Zocco's annual sales are $3,895,215 and all sales are on credit, what is the investment in accounts receivable? Round your answer to the nearest cent.
$  

How many times per year does Zocco turn over its inventory? Assume that cost of goods sold is 75% of sales. Round your answer to two decimal places.
times

Explanation / Answer

Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding

= 79 + 40 - 40 = 79 Days.

Zocco's annual sales = $ 3,895,215

Average Collection Period = 40 Days

Investment in Accounts Receivables = $ 3,895,215 * 40 / 365 = $ 426,872.87

Cost of Goods sold = 75% of sales = 75% * $ 3,895,215 = $ 2,921,411.25

Inventory Turnover = Cost of Goods sold / Inventory = $ 2,921,411.25 / Inventory.

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.