Assume a corportation has earnings before depreciation and taxes of $100,000, depreciation of $50,000, and is in a 30% percent tax bracket. Compute its cash flow using the format.   Earnings before depreciation and taxes   Depreciation                                                         Earnings before taxes                                          Taxes @ 30%                                                           Earnings after taxes      Depreciation 2a) In problem 1 , how much would cash flow be if there were only $10,000 in depreciation ? All other factors are the same. 2b) How much cash flow is lost due to the reduced depreciation between Problems 1 and 2a?

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.