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Unformatted text preview: in Inventory Capital Expenditure = Change in Net Fixed Assets + Depreciation Working Capital, another name for Current assets Chapter 18 Review Cash Conversion Cycle: Days of Sales Outstanding + Days of Sales in Inventory Days of Payable Outstanding DSO: Accounts receivable / (sales/365) DSI: Inventories / (cost of goods sold/365) DPO: Accounts payable / (cost of goods sold/365) Minimize Net working capital: Increase Payable, Decrease Receivables, Increase Inventory Turns Interest: Principal x rate x time APR: (Interest / Principal) x (1 / time) APY: [(1 + (APR/number of compounding periods (1 / (time/365)))^number of compounding periods] 1 *Compounding increases cost of short-term credit...
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- Fall '05