Van Den Borsh Corp has annual sales of $50,735,000, an average inventory level of $15,012,000, and average accounts receivable of $10,008,000 The firm 's cost of goods sold is 85 of sales The company makes all purchases on credit and has always paid on the 30th day However, it now plans to take ful...

Present cash conversion Cycle 12706 72 30 16 ...

Van Den Borsh Corp. has annual sales of $50,735,000, an average inventory level of $15,012,000, and average

Question:

Van Den Borsh Corp. has annual sales of $50,735,000, an average inventory level of $15,012,000, and average of $10,008,000. The firm's cost of goods sold is 85% of sales. The company makes all purchases on credit and has always paid on the 30th day. However, it now plans to take full advantage of trade credit and to pay its suppliers on the 40th day. The CFO also believes that sales can be maintained at the existing level but inventory can be lowered by $1,946,000 and by $1,946,000.
What will be the net change in the , assuming a 365-day year?
Cash Conversion Cycle
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...