Ait Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The company’s current assets consist of inventory and trade receivables. Current liabilities consist of accounts payables and an overdraft facility with an average interest rate of 10% per annum. The company gives 60 days credit to its customers and is allowed an average of 30 days credit by trade suppliers. The company has an operating cycle of 90 days. Current ratio of Ait Ltd 1.5:1 and the Cost of long-term finance to Ait Ltd is 12% per annum. Calculate the Size of the overdraft of Ait Ltd, Net working capital of the company and Total cost of financing its current assets?

Q: Sanders Prime Time Company has annual credit sales of $1,800,000 and accounts receivable of…

A: Average collection period (ACP) is the time taken to collect the cash from its accounts receivables.…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Step 1 Financial instruments are assets that can be traded, or contractual; agreement between…

Q: Setia Sdn Bhd had cash of RM13,000 on hand together with trade debtors' outstanding balance of…

A: Budgeting: It is a process of planning the work to be performed. Under this process a formal plan is…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate= Prime rate +4% = 8% + 4%= 12% Interest is calculated for the number of days on…

Q: Skylark Industries has P6,000,000 in inventory and P3,000,000 in accounts receivable. The company…

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: ABC Co has sales of $76m for the previous year. Receivables days are 58 and receivables are financed…

A: Accounts Receivables represents the amount the customers owe to the corporation on the account of…

Q: Winther Company has a receivables turnover of 15 times. The average net receivables during the…

A: Winther company's Receivable turnover = 15 Average net receivables = P430000 Average net receivable…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Prime rate The current interest rate charged by the financial institution to its customers is known…

Q: The following financial information relates to XYZ Company: Inventory turnover: 5 times Accounts…

A: Operating cycle measures the time taken by a company to convert its inventory into cash. Operating…

Q: d be employed. Only one proposal has so far been put forward concerning the management of trade…

A: 1. Credit policies are critical documents for nearly every organization, but especially for those…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: the line of credit is a pre-approved limit offered by financial institutions, banks, etc, you can…

Q: Given an annual credit sales value of 365 million; accounts receivable beg. 36.5 million, cost of…

A: Solution:- Average Collection Period means the average days it takes a firm to collect money from…

Q: Ait Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The…

A: Overdraft could be a credit extension from a bank to its bank account holders. The credit is…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Cook security systems has line of credit = $37500 Annual charge rate = 4% On October 1, Opening…

Q: What will be the net change in the cash conversion cycle, assuming a 365-day year?

A: Cash conversion cycle (CCC) refers to the time period (in days) taken by a company to convert its…

Q: What is the receivales turnover and what is the average collection period (days sales outstanding) ?

A: Information Provided: Credit sales = $10,640,000 Receivables = $1,520,000

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Interest rate applicable = Prime rate + premium Interest will be charge when the line of credit…

Q: pliers. It

A: (1) Following are the key factor which determines the level of investment in current asset. Type of…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: New balance  = balance  on 31 October  + interest

Q: Greene Sisters has a DSO of 20 days. The company’s average daily salesare $20,000. What is the level…

A: Receivable Turnover Ratio = No. of days in a year / Day's sales outstanding (DSO) Receivable…

Q: Bulldogs Inc. enters into an agreement with a firm that will factor the company's accounts…

A: The correct answer for the above mentioned question is given in the following steps.

Q: Cook Security Systems has a $37,500 line credit, which charges an annual percentag ate of prime rate…

A: Prime rate :- The prime rate is the rate of interest charged by commercial banks to their most…

Q: A firm's annual credit sales are $171 million, with 49.56% of its daily average paid out in…

A: Receivables refers to the net amount of money borrowed by the customers of the company from it,…

Q: ABCD Corporation has credit sales of $12,690,000 and receivables of $1,970,000. Assume there are 365…

A: Question is based on the concept of Financial ratios

Q: Given an annual credit sales value of 365 million; accounts receivable beg. 36.5 million, cost of…

A: Ratio analysis is a tool that establishes a relationship between the different items. It is used to…

Q: Sixty percent of Jesse's annual sales of P900,000 is on credit. If its year-end receivables turnover…

A: Annual Sales = 900,000 Credit Sales = 60% * Annual Sales = 60% * 900,000 = 540,000 Receivable…

Q: The Malibu Corporation has annual credit sales of $36 million. The average collection period is 38…

A: Ratio is a tool which is used to evaluate the growth and performance of the firm by establish the…

Q: Ait Limited has annual credit sales of Ghc5 million and cost of sales of GHC1.8 million. The…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS    Calculation of size of overdraft Inventory period =…

Q: A company has annual sales of $5,210,000 and its average daily accounts receivable is $377,000. What…

A: given that, annual sales = $5210000 average daily accounts receivables = $377000 365 days per year…

Q: The following information is an extract of the statement of profit or loss of Palladium Ltd for the…

A: Cash Sale=Rate×Annual Sales=20%×$625,000=$125,000 Credit Sale=Annual Sales-Cash…

Q: JOKER Company makes credit sales of P1,800,000 annually. The average age of accounts receivable is…

A: Account receivable means the amount due from customer whom we sold the goods on credit.

Q: Baxley Brother has a DSO of 23 days, and its annual sales are $3,650,000.  What is its accounts…

A:

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Line of credit (LOC) can be defined as the prespecified of money that can be borrowed from a lender…

Q: Hail & Sons operates for 240 days in a year. It has been offered credit terms of 4/30, net 90 days.…

A: Credit term refers to a method used by the firms to encourage buyer or debtor to pay the amount of…

Q: Assume that ABC Corporation pays for each purchase three (3) weeks after date of purchase. Maintains…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Terry's hardware normally takes 27 days to pay for average daily credit purchases of $9,530.  Its…

A: Part (a)Accounts receivable = Average daily credit sales x Average collection period = $ 10,680  x…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Here, Line of Credit is $37,500 Prime Rate is 8% Annual Percentage Rate is: Annual Percentage Rate =…

Q: Compute for the cash conversion cycle.

A: Cash conversion cycle refers to the time period taken a business entity in order to convert its…

Q: Cook Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime…

A: Loan is a value which is borrowed from the sources like bank and amount repaid later with and extra…

Q: Ammer Products has an average accounts payable balance of P850,000 and its annual net credit…

A: Accounts payable in the business means accounts of those suppliers from whom business has made…

Q: with an average interest rate of 10% per annum. The company gives 60 days credit to its customers…

A: Working capital: Managing day to day operations of an organisation is called working capital…

Q: Security Systems has a $37,500 line of credit, which charges an annual percentage rate of prime rate…

A: A line of credit (LOC) is a set amount of money that may be borrowed at any time.A line of credit…

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.