DEVRY FIN 515 Week 7 Problem Set

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DEVRY FIN 515 Week 7 Problem Set

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• FIN 515 Week 7 Problem Set
• Chapter 26 (page 903)
• Answer the following questions
• What is the difference between a firms cash
  cycle and its operating cycle?
• How will a firms cash cycle be affected if a
  firm increases its inventory, all else being
  equal?
• How will a firms cash cycle be affected if a
  firm begins to take the discounts offered by its
  suppliers, all else being equal?
• The Greek Connection had sales of 32 million in
  2012, and a cost of goods sold of 20 million. A
  simplified balance sheet for the firm appears
  belowCalculate The Greek Connections net
  working capital in 2012.Calculate the cash
  conversion cycle of The Greek Connection in 2012.
• The industry average accounts receivable days is
  30 days. What would the cash conversion cycle for
  The Greek Connection have been in 2012 if it had
  matched the industry average for accounts
  receivable days?

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• Assume the credit terms offered to your firm by
  your suppliers are 3/5, Net 30. Calculate the
  cost of the trade credit if your firm does not
  take the discount and pays on day 30.
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• Chapter 27 (page 925)
• Which of the following companies are likely to
  have high short-term financing needs? Why?A
  clothing retailerA professional sports teamAn
  electric utilityA company that operates toll
  roadsA restaurant chain
• Sailboats Etc. is a retail company specializing
  in sailboats and other sailing-related equipment.
  The following table contains financial forecasts
  as well as current (month 0) working capital
  levels. During which months are the firms
  seasonal working capital needs the greatest? When
  does it have surplus cash?
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