The working capital cycle of Yummy Ingredients Sdn. Bhd. is derived as follows: 50 days 48...

 

  

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The working capital cycle of Yummy Ingredients Sdn. Bhd. is derived as follows: 50 days 48 days Inventory Turnover Period Receivables Collection Period Payables Deferral Period Working Capital Cycle 112 days -14 days Yummy Ingredients Sdn. Bhd. offers a credit period of 55 days to its customers for sales made on credit while receives a credit period of 80 days from its suppliers for purchases made on credit. Moreover, the company is required to sell its products within a period of 35 days to preserve the freshness of ingredients sold to its customers. A research has shown that the average working capital cycle for companies in the similar industry is 45 days. (a) Analyse the following for the working capital management of the company: (i) Inventory Turnover Period; (ii) Receivables Collection Period; (4 marks) (5 marks) (b) Payables Deferral Period; (iv) Working Capital Cycle. With examples, explain any THREE (3) of the 5C's system that Yummy Ingredients can use for credit granting decision. (4 marks) (3 marks) Sdn. Bhd. (9 marks) [Total: 25 marks] The working capital cycle of Yummy Ingredients Sdn. Bhd. is derived as follows: 50 days 48 days Inventory Turnover Period Receivables Collection Period Payables Deferral Period Working Capital Cycle 112 days -14 days Yummy Ingredients Sdn. Bhd. offers a credit period of 55 days to its customers for sales made on credit while receives a credit period of 80 days from its suppliers for purchases made on credit. Moreover, the company is required to sell its products within a period of 35 days to preserve the freshness of ingredients sold to its customers. A research has shown that the average working capital cycle for companies in the similar industry is 45 days. (a) Analyse the following for the working capital management of the company: (i) Inventory Turnover Period; (ii) Receivables Collection Period; (4 marks) (5 marks) (b) Payables Deferral Period; (iv) Working Capital Cycle. With examples, explain any THREE (3) of the 5C's system that Yummy Ingredients can use for credit granting decision. (4 marks) (3 marks) Sdn. Bhd. (9 marks) [Total: 25 marks]

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