Read the following case study from your textbook:
• Casa de Diseño (p. 672)
Review the textbook topics related to the case study. Based on your analysis of the case study, respond to the following:
• Assuming a constant rate for purchases, production, and sales throughout the year, what are Casa de Diseño’s existing operating cycle (OC), cash conversion cycle (CCC), and resource investment need?
• If Leal can optimize Casa de Diseño’s operations according to industry standards, what will the company’s operating cycle (OC), cash conversion cycle (CCC), and resource investment need to be under these more efficient conditions?
• In terms of resource investment requirements, what is the cost of Casa de Diseño’s operational inefficiency?
• Answer the following:
• If in addition to achieving industry standards for payables and inventory, the firm can reduce the average collection period by offering credit terms of 3/10 net 60, what additional savings in resource investment costs will result for the shortened cash conversion cycle, assuming that the level of sales remains constant?
• If the firm’s sales (all on credit) are $40,000,000 and 45% of the customers are expected to take the cash discount, by how much will the firm’s annual revenues reduce as a result of the discount?
• If the firm’s variable cost of $40,000,000 in sales is 80%, determine the reduction in average investment in accounts receivable and the annual savings that will result from this reduced investment, assuming that sales remain constant.
• If the firm’s bad-debt expenses decline from 2% to 1.5% of sales, what annual savings will result, assuming the sales remain constant?
• On the basis of your analysis, what recommendations would you offer Teresa Leal?
Download and read the general instructions for case studies.
Write the case analysis in 3–4 pages in a Word document. Follow the APA style for writing, editing, and citation of sources. Submit the document to the assignment dropbox.