Pretty Lady Cosmetic Products has an average production process time of 40 days Finished goods are kept on hand for an average of 15 days before they are sold Accounts receivable are outstanding an average of 35 days, and the firm receives 40 days credit on its purchases from suppliers a Estimate t...

a Operating cycle Inventory period Receivable period 40 days 15 days 35 days 90 days turns per y ...

Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept

Question:

Pretty Lady Cosmetic Products has an average production process time of 40 days. Finished goods are kept on hand for an average of 15 days before they are sold. are outstanding an average of 35 days, and the firm receives 40-days credit on its purchases from suppliers.
a. Estimate the average length of the firm’s short-term operating cycle. How often would the cycle turn over in a year?
b. Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average investment in inventories, and accounts payable.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...