Williams & Sons last year reported sales of $127 million, cost of goods sold (COGS) of $105 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
Q: Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days…
A: To complete this we have to use the following formulas - Cash Conversion cycle = Debtor's…
Q: Data on Nathan Enterprises for the most recent year are shown below, along with the days sales…
A: Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities,…
Q: A firm with sales of $500,000 has average inventory of $200,000. the industry average for inventory…
A: Inventory turnover measures how many times, on average company sells its entire inventory during the…
Q: Kiley Corporation had the following data for the most recent year (in millions). The new CFO…
A: Cash Conversion Cycle (CCC): It Includes the days allowed to debtors, days take by inventory…
Q: xyz is trying to determine the effect of its inventory turnover ratio and days sales outstanding…
A: 1) Computation:
Q: SJU Resources last year reported cost of goods sold of $35 million and an inventory turnover ratio…
A: Inventory turnover ratio means the cost of goods sold divided with average stock.
Q: Over the last three years, management of Beltway, Inc. has seen Inventory Turnover go from 6.3 to…
A: CCC or Cash Conversion cycle is defined as the metric used to calculate the time taken by a company…
Q: Williams & Sons last year reported sales of $23 million, cost of goods sold (COGS) of $16 million,…
A: Given, Sales = $23 million COGS = $16 million Inventory turnover = 4 times Inventory Turnover (New…
Q: The Tamaraw Corporation is trying to determine the effect of its inventory turnover ratio and DSO on…
A: Answer - Part 1 - Computation of Tamaraw’s cash conversion cycle - Cash Conversion Cycle = Days…
Q: A firm is considering several policy changes to increase sales. It will increase the variety of…
A: Given: Increase in inventory=$11900Increase in average receivables =$68800Increase in sales=$819000…
Q: Kraft Inc, a retailer of dairy products, reported cost of goods sold for the year of $75 million.…
A: Calculating cash payment to suppliers: Cost of purchases = Cost of goods sold - Decrease in…
Q: Heritage Farms has sales of $1.62 million with costs of goods sold equal to 78 percent of sales. The…
A: CCC is number of days in which company should have recover cash form inventories and receivables and…
Q: 365-day year. He believes he can reduce the average inventory to $627,465 with no effect on sales.…
A: inventory conversion period =Average inventory/ Cost of goods sold x 365 Cost of goods sold…
Q: .You have recently been hired to improve the performance of MJ Cor., which has been experiencing a…
A: The company has given information to improve the performance of the company. Required Calculate the…
Q: Granada Inc. considers the following: i) a developed inventory management system could lower the…
A: The cash conversion cycle refers to the total of days inventory outstanding(DIO) and days sales…
Q: what it the firm’s cash conversion cycle?
A: Cash Conversion Cycle: It is a metric used in finance that indicates the time it takes for a firm…
Q: Lance Motors has current assets of $1.2 million. The company’s current ratio is 1.2, its quick ratio…
A: Compute the current Liabilities using the current ratio formula Curent ratio=Current AssetsCurrent…
Q: Williams & Sons last year reported sales of $73 million, cost of goods sold (COGS) of $60 million,…
A: The inventory turnover ratio has increased which shows that the company is selling the goods…
Q: The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin =…
A: Additional Funds needed (AFN): A company may need to raise funds needed for expansion when its…
Q: Jasper Jewelry has $150 million in sales. The company expects that its sales will increase 5% this…
A: Sales =$150 Million Sale increase percentage =5% Inventories = $11 + 0.07(Sales)
Q: Wall Mart Pictures and Decor Company has a net profit margin of 10% and its inventory turnover is 9.…
A: Given, Inventory Turnover = 9 Average Inventory = $96,700
Q: Kiley Corporation had the following data for the most recent year (in millions). The new CFO…
A: Calculation of cash conversion cycle: Answer: Cash conversion cycle is 34.01 days. So, CCC is…
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: The Barnsdale Corporation has the following ratios: A0*/S0 = 1.6; L0*/S0 = 0.4; profit margin =…
A: Here A0/S0=1.6 L0/S0=0.4 Profit Margin=0.10 Dividend Payout=0.45 Sales=$100 Mn Hence Asset=…
Q: As an operations management consultant, you have been asked to evaluate a furniture manufacturer's…
A: The question is related to Cash Operating Cycle:- The cash operating cycle (also known as the…
Q: Edison Inc. has annual sales of $36,500,000. The firm's cost of goods sold is 75% of sales. On…
A: Cash Conversion cycle means the time period within which the inventory sold or services business…
Q: The Tamaraw Corporation is trying to determine the effect of its inventory turnover ratio and DSO on…
A: Answer - Part 1 - Cash Conversion Cycle - Inventory conversion period + average collection period…
Q: A company has $20 million in cost of goods sold and an inventoryturnover ratio of 2.0. If it can…
A: The question is based on the concept calculation of inventory turnover ratio. Formula as,
Q: Bulldogs Inc. has a normal operating cycle of 32 days and cash conversion cycle of 25 days. Which of…
A: Formula - Cash operating cycle = The no. Of inventory days + Receivable days - payable Days
Q: Williams & Sons last year reported sales of $21 million, cost of goods sold (COGS) of $16 million,…
A: Inventory turnover ratio is an activity ratio which helps stakeholders like investors and…
Q: Samaritan Supplies, Inc. has P5 million in inventory and P2 million in accounts receivable. Its…
A: The inventory conversion period is the time period a firm takes to sell out its inventory. The firms…
Q: Christie Corporation is trying to determine the effect of its inventory turnover ratio and days…
A: Answer- Part 1 – Calculation of Cash Conversion Cycle - Inventory Conversion Period = 365 /…
Q: Chastain Corporation is trying to determine the effect of itsinventory turnover ratio and days sales…
A: Cash Conversion Cycle shows how much time (in days) will a company requires to convert investments…
Q: CCC Corp. has annual turnovers of inventory, receivables, and payables of 12, 18, 8 respectively.…
A: Difference in cash conversion cycle = cash conversion cycle of CCC Corporation - Cash conversion…
Q: Williams & Sons last year reported sales of $50 million, cost of goods sold (COGS) of $40 million,…
A:
Q: National Co. has P5 million in inventory and P2 million in accounts receivable. Its average daily…
A: Inventory conversion period = Inventory/Average daily cost of goods sold Note :- In case cost of…
Q: Williams & Sons last year reported sales of $39 million, cost of goods sold (COGS) of $30 million,…
A: Inventory turnover ratio can be calculated by cost of goods sold divided by average inventory.
Q: & Sons last year reported sales of $12 million, cost of goods sold (COGS) of Inventory Management…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Parker Products, Inc. is a manufacturer whose absorption costing income statement reported sales of…
A:
Q: Chastain Corporation is trying to determine the effect of its inventory turnover ratio and days…
A: Step 1: Compute the CCC (cash conversion cycle) as follows:
Q: a) Kareem & Sons last year reported sales of 12 million and an inventory turnover ratio of 4. The…
A: Inventory = Sales/ Inventory turnover ratio Accounts receivable = DSO * Average Day Sales
Q: b) Medwing Corporation has a DSO of 19 days. The company averages 5,500 in credit sales each day.…
A: Answer b: Average amount of receivables=Sales×DSO360=$5,500×19360=$290.28
Q: Inventory ManagementWilliams & Sons last year reported sales of $12 million, cost of goods…
A: One of an organization's most important commodities is its inventory. A firm's inputs and final…
Q: an increase or decrease in NWC
A: Working capital: The term working capital also known as net working capital is nothing but the…
Q: firm with sales of $500,000 has average inventory of $200,000. The industry average for inventory…
A: The inventory turnover ratio measures how many times the inventory is consumed in a given period of…
Q: Mannisto Inc. uses the FIFO inventory cost flow assumption. In a year of rising costs and prices,…
A: LIFO Method is an inventory valuation method where inventory purchased last sold first. Whereas as…
Q: Kiley Corporation had the following data for the most recent year (in millions). The new CFO…
A: Given, Average inventory = $4000 Improve in the credit department could reduce receivables =$2000…
Q: A firm with sales of $500,000 has average inventory of $200,000. T he industry average for inventory…
A: Computation of inventory turnover:
Q: Williams & Sons last year reported sales of $38 million, cost of goods sold (COGS) of $30 million,…
A: Inventory Turnover ratio is the rate at which a company sells and then replaces its inventory in a…
Q: Charlie’s Cycles Inc. has $110 million in sales. The companyexpects that its sales will increase 5%…
A: The inventory turnover ratio is the ratio which shows the average number of times the average…
Williams & Sons last year reported sales of $127 million, cost of goods sold (COGS) of $105 and an inventory turnover ratio of 5. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Round your answer to the nearest dollar.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 3 images
- Inventory Management Williams & Sons last year reported sales of $9 million, cost of goods sold (COGS) of $6 million, and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 6 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.Williams & Sons last year reported sales of $6 million, cost of goods sold (COGS) of $4 million, and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 4 while maintaining the same level of sales and COGS, how much cash will be freed up? Do not round intermediate calculations. Enter your answer in dollars. For example, an answer of $1.23 million should be entered as 1,230,000,000. Round your answer to the nearest dollar.SJU Resources last year reported cost of goods sold of $35 million and an inventory turnover ratio of 2. The company is now adopting a new inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 3 while maintaining the same level of sales, how much cash will be freed up?
- Check my work mode : This shows what is correct or incorrect for the work you have completed so far, It does not indicate comple A firm is considering several policy changes to increase sales. It will increase the variety of goods it keeps in inventory, but this will increase inventory by $11,900. It will offer more liberal sales terms, but this will result in average receivables increasing by $68,800. These actions are expected to increase sales by $819,000 per year, and cost of goods will remain at 70% of sales. Because of the firm's increased purchases for its own production needs, average payables will increase by $36,900. What effect will these changes have on the firm's cash cycle? (Use 365 days in a year. Do not round your intermediate calculations. Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Change in cash cycle 44 55 X days Prev 7 of 8 Next > to search Ir PInventory ManagementWilliams & Sons last year reported sales of $12 million, cost of goods sold(COGS) of $10 million, and an inventory turnover ratio of 2. The companyis now adopting a new inventory system. If the new system is able to reducethe firm’s inventory level and increase the firm’s inventory turnover ratioto 5 while maintaining the same level of sales and COGS, how much cashwill be freed up?a) Kareem & Sons last year reported sales of 12 million and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 8 while maintaining the same level of sales, how much cash will be freed up?b) Medwing Corporation has a DSO of 19 days. The company averages 5,500 in credit sales each day. What is the company’s average accounts receivable?c) McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases.a. What is the days sales outstanding?b. What is the average amount of receivables?c. What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day?d) International Industries sells on terms of…
- a) Kareem & Sons last year reported sales of 12 million and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 8 while maintaining the same level of sales, how much cash will be freed up? b) Medwing Corporation has a DSO of 19 days. The company averages 5,500 in credit sales each day. What is the company’s average accounts receivable? c) McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases.a. What is the days sales outstanding?b. What is the average amount of receivables?c. What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day? Solve only B and C sub parts.A company has $20 million in cost of goods sold and an inventoryturnover ratio of 2.0. If it can reduce its inventory and improve itsinventory turnover ratio to 2.5 with no loss in units sold and no changein cost of goods sold, by how much will FCF increase? ($2 million)Kareem & Sons last year reported sales of 12 million and an inventory turnover ratio of 4. The company is now adopting a new inventory system. If the new system is able to reduce the firm’s inventory level and increase the firm’s inventory turnover ratio to 8 while maintaining the same level of sales, how much cash will be freed up? Medwing Corporation has a DSO of 19 days. The company averages 5,500 in credit sales each day. What is the company’s average accounts receivable? McDowell Industries sells on terms of 4/10, net 40. Total sales for the year are $825,500. Thirty percent of customers pay on the 15th day and take discounts; the other 70% pay, on average, 60 days after their purchases. What is the days sales outstanding? What is the average amount of receivables? What would happen to average receivables if McDowell toughened its collection policy with the result that all non-discount customers paid on the 40th day? International Industries sells on terms of 3/10, net 50.…
- Kiley Corporation had the following data for the most recent year (in millions). The new CFO believes (1) that an improved inventory management system could lower the average inventory by $4,000, (2) that improvements in the credit department could reduce receivables by $2,000, and (3) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered? Original Revised Annual sales: unchanged $110,000 $110,000 Cost of goods sold: unchanged $80,000 $80,000 Average inventory: lowered by $4,000 $20,000 $16,000 Average receivables: lowered by $2,000 $16,000 $14,000 Average payables: increased by $2,000 $10,000 $12,000 Days in year 365 365Kiley Corporation had the following data for the most recent year (in millions). The new CFO believes (1) that an improved inventory management system could lower the average inventory by $4,000, (2) that improvements in the credit department could reduce receivables by $2,000, and (3) that the purchasing department could negotiate better credit terms and thereby increase accounts payable by $2,000. Furthermore, she thinks that these changes would not affect either sales or the costs of goods sold. If these changes were made, by how many days would the cash conversion cycle be lowered? (Hint: Calculate the CCC for original and then for revised and take the difference. SHOW ALL WORK)11. You have recently been hired to improve the performance of MJ Cor., which has been experiencing a severe cash shortage. As one part of your analysis, you want to determine the firm's cash conversion cycle. Data gathered were as follows: Current inventory Annual sales :P120,000 : P600,000 :P157,808 :P25,000 : P365,000 : net 30 days : net 50 days. Accounts receivable Accounts payable Total annual purchases Purchases credit terms Receivables credit terms Using 365-day year, the estimated current cash conversion cycle (in days) is? A. 49 В. 100 С. 144 Е. 193 D. 168