You were recently hired as CFO to improve the performance of Dennis Systems, which is...
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Finance
You were recently hired as CFO to improve the performance of Dennis Systems, which is highly profitable but has been experiencing cash shortages due to its high rate of growth. As one part of your analysis, you want to determine the firm's cash conversion cycle. Using the following information and a 365-day year, what is your estimate of the firm's present cash conversion cycle? Average inventory: $120,000 Annual sales: $600,000 Average accounts receivable: $160,000 Average accounts payable: $25,000 Total annual purchases: $365,000 Buy on net 30 days, no discounts: 30 Sell on net 50 days, no discounts: 50
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