Question 4 From BBT company's balance sheet and income statement in 2020, the following data are...

 

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Question 4 From BBT company's balance sheet and income statement in 2020, the following data are retrieved ($ million). Sales Cost of goods sold Inventories on January 1 Inventories on December 31 Accounts Receivable on January 1 Accounts Receivable on December 31 Accounts payable on January 1 Accounts payable on December 31 32.5 22.995 1.5 1.45 0.793 0.665 0.550 0.520 Required: a) Calculate the operating cycle of BBT company, on the basis of the given data. b) Calculate the cash conversion cycle of BBT company, on the basis of the given data. | c) Recently BBT company has extended its credit period unilateral with 30 days. What influence will this have on the operating cycle (OC) and cash conversion cycle (CCC)? d) Suppose BBT company starts a reverse factoring program for its suppliers. What will the effect be on the cash conversion cycle of BBT company and the cash conversion cycle of BBT company's suppliers? Question 4 From BBT company's balance sheet and income statement in 2020, the following data are retrieved ($ million). Sales Cost of goods sold Inventories on January 1 Inventories on December 31 Accounts Receivable on January 1 Accounts Receivable on December 31 Accounts payable on January 1 Accounts payable on December 31 32.5 22.995 1.5 1.45 0.793 0.665 0.550 0.520 Required: a) Calculate the operating cycle of BBT company, on the basis of the given data. b) Calculate the cash conversion cycle of BBT company, on the basis of the given data. | c) Recently BBT company has extended its credit period unilateral with 30 days. What influence will this have on the operating cycle (OC) and cash conversion cycle (CCC)? d) Suppose BBT company starts a reverse factoring program for its suppliers. What will the effect be on the cash conversion cycle of BBT company and the cash conversion cycle of BBT company's suppliers?

Answer rating: 100% (QA)

a Days of inventory in hand 365 x average inventory COGS 365 x 15 1452 22995 365 x 1475 22995 234127 ... View the full answer