(a) Explain the meaning of the term working capital cycle for a trading company. (b) Calculate the...
Question:
(a) Explain the meaning of the term ‘working capital cycle’ for a trading company.
(b) Calculate the working capital cycle in days from the information provided.
(c) State one advantage to a business of keeping its working capital cycle as short as possible.
Transcribed Image Text:
Sales (all on credit) Less: Opening inventory Purchases Closing inventory Gross profit Receivables at year end Payables at year end £'000 £'000 1,000 100 800 (200) (700) 300 250 150
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a Working Capital Cycle for a Trading Company The working capital cycle also known as the cash conversion cycle is a measure of the time it takes for ...View the full answer
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Related Book For
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict
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