You are a finance manager for Serai Sdn. Bhd., a company that manufactures floor tiles. You...

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You are a finance manager for Serai Sdn. Bhd., a company that manufactures floor tiles. You are provided with the following information of the company: Receivables Payables Inventories Annual credit sales Cost of goods is 60% on sales a. 2020 $ 90,000 b. 40,000 35,000 2021 $ 75,000 Required: Make use of the information above, calculate the cash conversion cycle, to the nearest day. 30,000 25,000 500,000 (15 marks) Explain the implications of your answer in part (a)(i) above and recommend the ways which the company can use to shorten the cash conversion cycle. (10 marks) You are a finance manager for Serai Sdn. Bhd., a company that manufactures floor tiles. You are provided with the following information of the company: Receivables Payables Inventories Annual credit sales Cost of goods is 60% on sales a. 2020 $ 90,000 b. 40,000 35,000 2021 $ 75,000 Required: Make use of the information above, calculate the cash conversion cycle, to the nearest day. 30,000 25,000 500,000 (15 marks) Explain the implications of your answer in part (a)(i) above and recommend the ways which the company can use to shorten the cash conversion cycle. (10 marks)

Answer rating: 100% (QA)

a To calculate the cash conversion cycle CCC we need to use the following formula CCC Days of Inventory Outstanding DIO Days of Sales Outstanding DSO ... View the full answer