Case 3. ABC Pvt. Ltd. is a retail company specializing in electronics. They have provided the following data for analysis: • Current Assets: *20,00,000 • Current Liabilities: *10,00,000 • Inventory Turnover Ratio: 6 times • Receivables Turnover Ratio: 8 times • Payables Turnover Ratio: 4 times Questions: 2/4 1. Explain the concept of the working capital cycle. How does it impact a company's cash flow? 2. How does inventory management affect working capital? Discuss techniques that companies can use to optimize their inventory levels. 3. Calculate the working capital cycle for ABC Pvt. Ltd. 4. Interpret the working capital cycle and its implications for the company's liquidity and efficiency. Case 4.
Case 3. ABC Pvt. Ltd. is a retail company specializing in electronics. They have provided the following data for analysis: • Current Assets: *20,00,000 • Current Liabilities: *10,00,000 • Inventory Turnover Ratio: 6 times • Receivables Turnover Ratio: 8 times • Payables Turnover Ratio: 4 times Questions: 2/4 1. Explain the concept of the working capital cycle. How does it impact a company's cash flow? 2. How does inventory management affect working capital? Discuss techniques that companies can use to optimize their inventory levels. 3. Calculate the working capital cycle for ABC Pvt. Ltd. 4. Interpret the working capital cycle and its implications for the company's liquidity and efficiency. Case 4.
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter4: Analysis Of Financial Statements
Section: Chapter Questions
Problem 7DQ: From the Google Finance site, use the DuPont analysis to determine the total assets turnover ratio...
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