a. Find the cash conversion cycle for the last 3 years. What (if any) changes in the cash conversion cycle?

b. Based on days sales outstanding, select the closest 30-day increment to that result (30, 60, 90 or 120 days). Assume your firm sells on terms of 3/20, net closest increment. Example: Days sales outstanding = 55 days, then the closest is 60 days and the terms are 3/20 net 60. Find the APR and effective rate on the cost of trade credit.

c. The firm discovers that one of their large customers, Shad Services, does not pay until day 100 days after the net date. This is causing the days sales outstanding to appear larger than it is. What is the effective cost of trade credit for Shad?

d. The firm wants to make Shad pay earlier. What can the firm do to make that happen? What are the risks?

Financial Statement Information Receivables Sales Inventory Payables Cost of Goods Sold 2 years ago 245,000 7,015,000 55,000 378,000 4,815,000 1 year ago 211,000 7,658,000 78,000 437,000 5,582,000 Most recent year 231,000 8,094,000 81,000 401,000 5,884,000 Financial Statement Information Receivables Sales Inventory Payables Cost of Goods Sold 2 years ago 245,000 7,015,000 55,000 378,000 4,815,000 1 year ago 211,000 7,658,000 78,000 437,000 5,582,000 Most recent year 231,000 8,094,000 81,000 401,000 5,884,000