Blondie Inc. has annual sales of $13m and cost of goods sold of $8m. Its average...

     

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Blondie Inc. has annual sales of $13m and cost of goods sold of $8m. Its average inventory is $0.6m. What is the Inventory Days on Hand? O 27.4 days O 10.4 days O 16.8 days O 20.9 days Cycles Inc. imports bicycles to sell onto high-street retailers. Most of their sales take place at the beginning of September as retailers stock up for the winter festive season. Cycles Inc. order most of their inventory in early June taking delivery early August. Suppliers are paid on delivery. Inventory and receivable days are 30 days and 60 days respectively. When will Cycle Inc. have its greatest short-term borrowing requirement? O June, July and August. O September, October and November. O July, August, September. O August, September and October. XYZ Inc. has an average of 5 days Inventory on hand, 15 days accounts receivable and 30 days accounts payable. What are the implications of this on the accounts? O Accounts receivable would be much greater than accounts payable. O XYZ would have a relatively low accounts receivable balance, but a high current liabilities balance. O XYZ would have a relatively large current assets balance and very low current liabilities. O Accounts payable and cash would probably be very low. Seagull Trading has sales for the year of $1.375M. Cost of goods sold is $0.875M. On its balance sheet, you see average accounts receivable of $0.225M, accounts payable of $0.105M, and inventory of $0.175M. What is its short-term financing gap? O 132.7 days O 88.9 days O 176.5 days O 57.1 days Which factor would be most likely to indicate an increased risk of default on short-term borrowing? O Training credit collection staff so as to reduce accounts receivable days. O Production problems leading to an increase in inventory days. O Improved warehousing leading to a decrease in inventory days. O An improvement in underlying business performance. Identify the most appropriate statement with regard to managements' objectives in managing the operating cycle. O Management should aim to manage the inventory element to as short a period as possible. Receivable and Payables are usually governed by external factors and management can have little influence over them. O The measurement of the operating cycle is meaningless from a performance perspective as successful businesses in the same industry can have very different operating cycles depending on their strategic aims. O The most common objective is to make the operating cycle as short as possible, thereby minimizing the amount of cash tied up in working capital. Variations to this objective should be a conscious strategic choice by management. O Most businesses have multiple operating cycles and so it is not possible for managers to actively manage each of these cycles. Information regarding the operating cycle should not therefore be measured as part of managers performance. Blondie Inc. has annual sales of $13m and cost of goods sold of $8m. Its average inventory is $0.6m. What is the Inventory Days on Hand? O 27.4 days O 10.4 days O 16.8 days O 20.9 days Cycles Inc. imports bicycles to sell onto high-street retailers. Most of their sales take place at the beginning of September as retailers stock up for the winter festive season. Cycles Inc. order most of their inventory in early June taking delivery early August. Suppliers are paid on delivery. Inventory and receivable days are 30 days and 60 days respectively. When will Cycle Inc. have its greatest short-term borrowing requirement? O June, July and August. O September, October and November. O July, August, September. O August, September and October. XYZ Inc. has an average of 5 days Inventory on hand, 15 days accounts receivable and 30 days accounts payable. What are the implications of this on the accounts? O Accounts receivable would be much greater than accounts payable. O XYZ would have a relatively low accounts receivable balance, but a high current liabilities balance. O XYZ would have a relatively large current assets balance and very low current liabilities. O Accounts payable and cash would probably be very low. Seagull Trading has sales for the year of $1.375M. Cost of goods sold is $0.875M. On its balance sheet, you see average accounts receivable of $0.225M, accounts payable of $0.105M, and inventory of $0.175M. What is its short-term financing gap? O 132.7 days O 88.9 days O 176.5 days O 57.1 days Which factor would be most likely to indicate an increased risk of default on short-term borrowing? O Training credit collection staff so as to reduce accounts receivable days. O Production problems leading to an increase in inventory days. O Improved warehousing leading to a decrease in inventory days. O An improvement in underlying business performance. Identify the most appropriate statement with regard to managements' objectives in managing the operating cycle. O Management should aim to manage the inventory element to as short a period as possible. Receivable and Payables are usually governed by external factors and management can have little influence over them. O The measurement of the operating cycle is meaningless from a performance perspective as successful businesses in the same industry can have very different operating cycles depending on their strategic aims. O The most common objective is to make the operating cycle as short as possible, thereby minimizing the amount of cash tied up in working capital. Variations to this objective should be a conscious strategic choice by management. O Most businesses have multiple operating cycles and so it is not possible for managers to actively manage each of these cycles. Information regarding the operating cycle should not therefore be measured as part of managers performance.

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Q1 A financial statistic called Inventory Days on Hand DSI indicates how long an organisation typically keeps its inventory on hand before selling it It is computed by multiplying the result by 365 wh... View the full answer