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2 years ago

How would a company's working capital be affected if a substantial amount of accounts payable were paid in cash?

1 answer:

3 0

If a company pays most of the major payments through cash it means its cash flow will be reduced due to the company’s working capital will also reduce but the current liabilities will remain unchanged.

Cash flow includes in Current assets of the company and is considered to be the strength of the company's working capital. therefore with the cash payments company's current assets will reduce and this reduction weakens working capital.

For example, Individual A pays most of the payments through cash and his current assets are being reduced due to that his working capital would also reduce with its cash flow but the liabilities will remain unchanged as they are long-term debt.

Liabilities are of more than a year or about a year due to that they’ll not affect the current assets of the company and this will not affect its working capital.

You can learn more about Economics Capitals: brainly.com/question/28179485

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Answer: Turn down the acquisition offer and prepare to resist a hostile takeover.

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Since Johnson analysed the past performance of Openlane hardware and found out that past performance, conducting focus groups, and interviewing Openlane employees, Johnson concludes that the company has poor profit margins, sells shoddy merchandise, and treats customers poorly, then Johnson and Conecom Hardware should turn down the acquisition offer and prepare to resist a hostile takeover.

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3 years ago

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Answer:

A Star.

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The Boston Consulting Group (BCG) matrix depicts a product's market share against the market growth rate. The matrix is also known for it's cow- dog metaphor.

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2. Cash Cows: Products with high market share in low growth markets.

3. Question Mark: Products with low market share in a high growth markets.

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3 years ago

During a recent fiscal year, creek company reported pretax income of $117,000, a contribution margin ratio of 20% and total cont

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To solve this problem, we use the formula in calculating for the total variable cost (COGS):

Revenue - COGS - SG&A = Pretax profits

where SG & A is calculated as:
SG & A = (Contribution - Prextax income)
SG & A = ($320,000 - $117,000)
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Calculating for revenue using the margin ratio:
Contribution margin/Revenue = Contribution Margin Ratio
Revenue = Contribution Margin/Contribution Margin Ratio
Revenue = $320,000/.20

Revenue = $1.6m

Going back to the 1st formula:
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COGS = $1.6m - $117k - $275k

COGS = $1.208 million

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