The credit analyst for Mazibuko Limited has established the following data relating to the working capital cycle of the firm: 30 days Credit payment period for raw materials 50 days Raw material delivery to completed goods ● ● Debtors collection period Completed goods to credit sales Required: Calculate the following: 80 days 20 days 3.1.1 The cash conversion cycle 3.1.2 The period during which financing will be required 3.1.3 Discuss four measures that can be implemented to reduce the period for which financing is required

The credit analyst for Mazibuko Limited has established the following data relating to the working capital cycle of the firm: 30 days Credit payment period for raw materials 50 days Raw material delivery to completed goods ● ● Debtors collection period Completed goods to credit sales Required: Calculate the following: 80 days 20 days 3.1.1 The cash conversion cycle 3.1.2 The period during which financing will be required 3.1.3 Discuss four measures that can be implemented to reduce the period for which financing is required

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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The credit analyst for Mazibuko Limited has established the following data relating to the working capital cycle of the firm: Credit payment period for raw materials 30 days Raw material delivery to completed goods 50 days  Debtors collection period 80 days Completed goods to credit sales 20 days Required:Calculate the following: 3.1.1 The cash conversion cycle 3.1.2 The period during which financing will be required 3.1.3 Discuss four measures that can be implemented to reduce the period for which financing is required
A firm has an average age of inventory of 65 days, an average collection period of 45 days, and an average payment period of 30 days. The firm's cash conversion cycle is a. 110 days b. 45 days c. 75 days d. 80 days
Brothers Breads has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 50 days Average collection period = 17 days Payables deferral period = 25 days a. 46 days b. 31 days c. 42 days d. 38 days e. 34 days
Financial information pertaining to Alya Sdn Bhd (see the picture) Beginning cash balance is RM1,800,000 Sales are on credit and are collected 50 percent in the current period and the remainder in the next period. Last quarter’s sales were RM8,400,000. There are no bad debts. Purchases of direct materials and labor costs are paid for in the quarter acquired. Manufacturing overhead expenses are paid in the quarter incurred. Selling and administrative expenses are all fixed and are paid in the quarter incurred. They are budgeted at RM340,000 per quarter, including RM90,000 of depreciation. Required: prepare sales budget and thenrefer to the sales budget to Construct a cash budget for Alya Sdn Bhd for the quarter ending 30th September 2021.
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Provided the following information: Sales =$1,440,000, Cost of Goods Sold= $1,100,000, Inventory=$200,000, Receivables=$160,000, Payables=S100,000 and there are 365 days in a year. What is the cash conversion cycle for the firm? a. 113.55 Days b. 77.05 Days c. 150.05 Days d. 73 Days e. None of the above
A firm has an average age of inventory of 100 days, an average collection period of 40 days, and an average payment period of 30 days. The firm's cash conversion cycle is?
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A production Enterprise is considering introduction of a new product into the market. Detailed calculations of expected revenues are presented in the table below: Thousands euro Revenues Closing balance Account payables Year 1 Inventory of production materials Inventory of finished products 700 The firm's analysts estimated that investment outlays to start the production (investment, research and development) would amount to EUR 650 thousand. Average variable costs account for about 55% of revenues. Depreciation of investment outlays amounts to 33,33% annually. After the 3rd year, the fixed assets are expected to have a market value of 100 thousand Euro (despite being fully depreciated). The performed analysis suggests that implementation of the project would cause overheads at the company to rise by ca. EUR 100 thousand annually. The table below presents forecast for the share of liabilities, production materials and stock in revenues: Year 1 14% 12% Year 2 8% 800 Year 2 14% 11% Year…
The financial manager of Sarap Corporation wants to determine the amount of cash outlays to be spent for the next period. He asked the help of the accountant and the latter provided a cash budget for the next year. According to the computations, the company would be incurring cash expenses of P6,612,500 per month. The financial manager has estimated a cost of P40 per transaction in case non-cash asset is converted to cash. The firm's opportunity cost ratio is 12%. a. The optimum cash balance is?