Question: a) Data on Nathan Enterprises for the most recent year are shown below, along with the days sales outstanding of the firms against which it
a) Data on Nathan Enterprises for the most recent year are shown below, along with the days sales outstanding of the firms against which it benchmarks. The firm's new CFO believes that the company could reduce its receivables enough to reduce its DSO to the benchmarks' average. If this were done, by how much would receivables decline? Use a 365-day year.
| Sales | $110,000 |
| Accounts receivable | $16,000 |
| Days sales outstanding (DSO) | 53.09 |
| Benchmark days sales outstanding (DSO) | 20.00 |
b) Brothers Breads has the following data. What is the firm's cash conversion cycle?
| Inventory conversion period = | 50 days |
| Average collection period = | 17 days |
| Payables deferral period = | 25 days |
c) Mark's Manufacturing's average age of accounts receivable is 45 days, the average age of accounts payable is 40 days, and the average age of inventory is 69 days. Assuming a 365-day year, what is the length of its cash conversion cycle?
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