Town Mills Ltd is a wholesale business. Extracts from the businesss most recent financial statements are as

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Town Mills Ltd is a wholesale business. Extracts from the business’s most recent financial statements are as follows:

Required:

(a) Calculate the average operating cash cycle (in days) during the year ended 31 May and explain to what use this value can be put and what limitations it has.

(b) Discuss whether there is evidence that the business has a liquidity problem.

(c) Explain the types of risk and cost that might be reduced by following the finance director’s proposal to reduce inventories levels.

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Accounting And Finance For Non Specialists

ISBN: 9781292334691

12th Edition

Authors: Peter Atrill, Eddie McLaney

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Question Posted: Jan 10, 2024 08:00 AM

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Town Mills Ltd is a wholesale business. Extracts from the businesss most recent financial statements are as

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a Operating cash cycle Knowledge of the length of the operating cash cycle OCC allows the business to monitor it over time perhaps relative to other businesses or to some target It is not possible to ...View the full answer

Accounting And Finance For Non Specialists

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