Compute the new ccc be how much cash would be freed up , Ask an Expert

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Q1) Primrose Corp has $15 million of sales, $2 million of inventories, $ 3 million of receivables, and $1 million of payables. Its costs of goods sold are 80% of sales, and it finances working capital with bank loans at 8% rate. Compute Primrose's cash conversion cycle (CCC)? If Primrose could lower its inventories and receivables by 10% each and increase its payables by 10%, all without affecting either sales or cost of goods sold, compute the new CCC be, how much cash would be freed up, and how would that affect pre-tax profits?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M921457

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