The Biratnagar Biscuit Factory has an inventory turnover of 2.4 times, a receivables collection period of 76 days and a payable deferral period of 60 … (Solved)

Question

The Biratnagar Biscuit Factory has an inventory turnover of 2.4 times, a receivables collection period of 76 days and a payable deferral period of 60 days. Assume 360 days per year.

(a) What is the length of the firm’s cash conversion cycle ?

(b) If the company’s annual sales are Rs. 6.75 Millions and 80% sales are on credit, what is the firm’s investment in account receivables?

(c) How many times per year does the company turn over its inventory?

Answer

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