Explaining working capital and on cash conversion cycle


Q1) New computer system permits your firm to more correctly monitor inventory and anticipate future inventory shortfalls. As a result, firm feels more able to pare down its inventory levels. What effect will new system have on working capital and on cash conversion cycle?

Q2) Company has EPS of $2.00, cash flow per share of $3.00, and a price/ cash flow ratio of 8.0x. Determine its P/E ratio?

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Accounting Basics: Explaining working capital and on cash conversion cycle
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