As a new finance manager of S&T Pte Ltd, you are responsible in managing the firm's...
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As a new finance manager of S&T Pte Ltd, you are responsible in managing the firm's financial affairs. Your review of the business cycle reveals that S&T Pte Ltd's inventory typically remains with the firm for 20 days before it is sold and requires 30 days for the monies to be collected from the customers. On average, the firm takes 40 days to pay its suppliers. a) Compute the cash conversion cycle (CCC) of S&T Pte Ltd. Comment on your answer. b) Should S&T Pte Ltd lengthen or shorten its CCC? Why? c) Suggest TWO ways in which S&T Pte Ltd can improve its CCC. As a new finance manager of S&T Pte Ltd, you are responsible in managing the firm's financial affairs. Your review of the business cycle reveals that S&T Pte Ltd's inventory typically remains with the firm for 20 days before it is sold and requires 30 days for the monies to be collected from the customers. On average, the firm takes 40 days to pay its suppliers. a) Compute the cash conversion cycle (CCC) of S&T Pte Ltd. Comment on your answer. b) Should S&T Pte Ltd lengthen or shorten its CCC? Why? c) Suggest TWO ways in which S&T Pte Ltd can improve its CCC.
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Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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