PLEASE ANSWER ALL THE QUESTIONS AND SHOW ALL YOUR WORK BECAUSE I HAVE TO SUBMIT
ID: 2712587 • Letter: P
Question
PLEASE ANSWER ALL THE QUESTIONS AND SHOW ALL YOUR WORK BECAUSE I HAVE TO SUBMIT IT SHOWING WORK. PLEASE PLEASE PLEASE MAKE SURE YOU KNOW WHAT YOU ARE DOING BECAUSE THIS IS 10% OF MY FINAL GRADE! PLEASE AND THANK YOU:)
1. Go to http://finance.yahoo.com and get a quote for one company of your choice. On the left column, scroll down and select “Income Statement.” Write down the annual sales and cost of goods sold for the most recent two years.
2. Select the firm's Balance Sheet. Write down the balances shown for the firm's inventories, accounts receivable, and accounts payable.
3. Using the information from parts a and b, calculate its inventory turnover, accounts receivable turnover, and accounts payable turnover. You should show your work!
4. Calculate production cycle, collection cycle, and accounts payable cycle. You should show your work! 5. What is the company’s cash conversion cycle? You should show your work!
6. Discuss the results that you receive in one paragraph. Should the company decrease cash conversion cycle? Please explain your answer.
Explanation / Answer
Answer:1 I have chosen Nike incorporation for this week work
Answer:2 Select the firm's Balance Sheet. Write down the balances shown for the firm's inventories, accounts receivable, and accounts payable
Answer:3 Using the information from parts a and b, calculate its inventory turnover, accounts receivable turnover, and accounts payable turnover.
Inventory turnover = Cost of goods sold/ Average inventory
=15,353,000/ ((3,947,000+3,484,000)/2) =4.13
Account Receivable turnover= Sales/Average receivables
=27,799,000/ ((3,789,000+3,425,000)/2) =7.71
Account payable turnover=Total purchases/Average account payable
Purchases =Cost of sale + ending inventory – beginning inventory
= 15,353,000+ 3,947,000 -3,484,000 =15,816,000
Account payable turnover=15,816,000/ ((4,853,000+3,789,000)/2) =3.66
Answer:4 Calculate production cycle, collection cycle, and accounts payable cycle.
Production cycle=365 days/ITR
=365/4.13=88.38 days
Average collection cycle = 365 / (A/R turnover rate).
=365/7.71=47.34 days
Accounts Payable Cycle = 365 / Average Payable Turnover
=365/3.66=99.73 days
5. What is the company’s cash conversion cycle?
Answer:Cash conversion cycle=Production cycle+Collection cycle-payment cycle
=88.38 days+47.34 days-99.73 days
=35.99 days
Fiscal 2014 2013 Revenue 27799000 25313000 Cost of sales 15353000 14279000Related Questions
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