ch23 Cash Conversion Cycle Demo Problem

ch23 Cash Conversion Cycle Demo Problem - © 2011 Dr....

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Chapter 23 Cash conversion cycle Data Computer Corporation Balance Sheet (000s omitted) Cash $4,000 Accounts payable $3,000 Accounts receivable 8,000 Note payable 2,000 Inventories 4,000 Accruals 2,440 1 © 2011 Dr. William F. Rentz & Associates
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Example: cash conversion cycle ADSI = (Inv. x 365)/COGS ADSI = ($4M x 365)/$36.5M = 40 days ACP = (Rec. x 365)/Sales ACP = ($8M x 365)/$73M = 40 days
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Unformatted text preview: © 2011 Dr. William F. Rentz & Associates 2 Example: cash conversion cycle OC = ADSI + ACP OC = 40 days + 40 days = 80 days ADSP = (AP x 365)/COGS ADSP = ($3M x 365)/$36.5M = 30 days © 2011 Dr. William F. Rentz & Associates 3 Example: cash conversion cycle CCC = OC – ADSP CCC = 80 days – 30 days = 50 days © 2011 Dr. William F. Rentz & Associates 4...
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This note was uploaded on 03/12/2012 for the course TELFER ADM2350 taught by Professor Rentz during the Winter '12 term at University of Ottawa.

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ch23 Cash Conversion Cycle Demo Problem - © 2011 Dr....

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