Glacier Ski and Sports operates in the highly seasonal ski and snowboard equipment manufacturing industry. Although Glaciers
Glacier Ski and Sports operates in the highly seasonal ski and snowboard equipment manufacturing industry. Although Glacier’s sales are highly seasonal, to obtain production efficiencies it produces ski and snowboard equipment evenly throughout the year. Use the information below to answer the questions that follow.
a. Calculate Glacier’s collection period, days inventory outstanding, and payables period for each quarter. For simplicity, assume that each quarter has 90 days.
b. Calculate Glacier’s operating cycle and cash conversion cycle for each quarter. How do they vary by quarter, and why?
c. How is this pattern in the cash conversion cycle likely to affect Glacier’s need for funding?
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