Working Capital Calculation

May 19th, 2015
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Aberystwyth University
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Calculate Inventory Holding period * Receivable holding period * Pay – 30

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1. Minny Fishing Products is analyzing the performance of its cash management. On the average, the firm holds inventory 65 days, pays its suppliers in 35 days, and collects its receivables in 15 days. The firm has a current annual outlay of $1,960,000 on operating cycle investments. Minny currently pays 10 percent for its negotiated financing. (Assume a 360 day year.)(a) Calculate the firms cash conversion cycle.(b) Calculate the firms operating cycle.(c) Calculate the daily expenditure and the firms annual savings if the operating cycle is reducedby 15 days.2. Dons So

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