1. AZ Inc. had credit sales of $6,500,000 last year and its days sales outstanding was DSO = 50 days. What was its average receivables balance, based on a 365-day year?
2. Firm Q has $350 million of sales, $60 million of inventories, $70 million of receivables, and $45 million of payables. Its cost of goods sold is 75% of sales. Calculate its current cash conversion cycle based on the available information.
3. Estimate the cash conversion cycle based on the following available information. Revenue = $235 million Cost of goods sold = $211.5 million Account receivables = $65 million Inventories = $100 million Account payables = $80 million
4. A company has a days sales outstanding (DSO) of 80 days (on a 365-day basis per year). All sales are on credit. It has an account receivable of $120 million and inventory of $150 million. a) What is the inventory turnover ratio? b) If the payables deferral period is 65 days, what is the length of the cash conversion cycle?