Granada Inc. considers the following: i) a developed inventory management system could lower the average inventory by $4,000 ii) improvements in the credit department could reduce account receivables by $2,000 iii) the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Also, the company thinks that these changes would not affect either sales or the costs of goods sold. If the changes above were made, by how many days would the cash conversion cycle be lowered?

Granada Inc. considers the following: i) a developed inventory management system could lower the average inventory by $4,000 ii) improvements in the credit department could reduce account receivables by $2,000 iii) the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Also, the company thinks that these changes would not affect either sales or the costs of goods sold. If the changes above were made, by how many days would the cash conversion cycle be lowered?

Name: 2Below are some financial data of Granada Inc.Annual sales: unchanged
Uploaded: 2024-03-20T06:32:37.000Z
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Description: 2Below are some financial data of Granada Inc.Annual sales: unchangedCost of goods sold: unchangedAverage inventory: lowered by $4,000Average receivables: lowered by $2,000Average payables: increased by $2,000Days in yearOriginal110,00080,00020,0001

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 15BEA: Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000....

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Last year, Nikkola Company had net sales of 2,299,500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average inventory. 2. Calculate the inventory turnover ratio. 3. Calculate the inventory turnover in days. 4. CONCEPTUAL CONNECTION Based on these ratios, does Nikkola appear to be performing well or poorly?
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The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
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