Use the given information about BBB Pty Ltd to answer the questions that follow:

Sales P10, 000,000

Average inventories P2, 000,000

Cost of goods sold P8, 000,000

Receivables P666, 667 Average

Accounts payable P666, 667

Required:

a. Define the cash conversion cycle. (2 marks)

b. Calculate BBBs Average Age of Inventory. (4 marks)

c. Calculate BBBs Average Collection Period. (4 marks)

d. Calculate the Accounts Payable Period. (4 marks)

e. Calculate the BBBs cash conversion cycle. (4 marks)

f. Advise BBB on what they should do to reduce their cash conversion cycle. (3 marks)

g. Explain two strategies that BBB can use to fund its cash conversion cycle requirements. (4 marks)