Smith Plc can receive four week's credit from its supplier of raw materials. The com- pany...
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Smith Plc can receive four week's credit from its supplier of raw materials. The com- pany takes 20 days to convert the raw materials into finished goods ready for sale. In addition, as per industry standards, the company provides credit terms of 35 days to its customers. a. What is the company's operating cycle? Assume products are sold as soon as they are completed. b. How is operating cycle different from cash conversion cycle? Smith Plc can receive four week's credit from its supplier of raw materials. The com- pany takes 20 days to convert the raw materials into finished goods ready for sale. In addition, as per industry standards, the company provides credit terms of 35 days to its customers. a. What is the company's operating cycle? Assume products are sold as soon as they are completed. b. How is operating cycle different from cash conversion cycle?
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The company receives four weeks 28 days of credit from its supplier The number of days it ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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