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2 years ago

Planing function means

Business

1 answer:

MatroZZZ [7]2 years ago

7 0

Answer:

Explanation:

Planning function is the process of establishing goals and arranging them in logical order for the purpose of achieving a desired goal.

Planning is an important aspect of an organization so as to help them achieve their goals faster. It is done at all levels in an organization. Planning is done using the available resources, also achieving a balance between the needs and wants of the organization.

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Van Den Borsh Corp. has annual sales of $68,735,000, an average inventory level of $15,012,000, and average accounts receivable

pantera1 [17]

Answer:

The Cash Conversion Cycle is the number of days it takes management of a company to convert its inventory into cash on hand after its business transactions. It is a useful metric for measuring the effectiveness of management, especially for companies with inventory of goods for sale.

CCC combines the days of inventory outstanding, accounts receivable outstanding, less accounts payable outstanding to obtain a value based on days.

Therefore, the net change in the Cash Conversion Cycle (CCC) in this scenario is the difference between the previous CCC and the new one based on the new proposals.

a) Days Inventory Outstanding or DIO = Average Inventory divided by Cost of Goods Sold (COGS)per day. Cost of Goods Sold is 85% of sales.

DIO = $15,012,000 / $58,424,750 x 365 days = 94 days

b) Days Sales Outstand or DSO = Average Accounts Receivable divided by Revenue per day.

DSO = $10,008,000 /$68,735,000 x 365 days = 53 days

c) Days Payable Outstanding or DPO = Average Accounts Payable divided by COGS

DPO = 30 days, as given in the question

d) CCC = DIO + DSO - DPO

CCC = 94 + 53 - 30 = 117 days

Based on the new proposals, the CCC is calculated as follows:

a) DIO = $15,012,000 - $1,946,000 / $58,424,750 x 365 days = 82 days

b) DSO = $10,008,000 - $1,946,000 /$68,735,000 x 365 days = 43 days

c) DPO = 40 days as given.

New CCC = 82+43-40 = 85 days.

Therefore, the net change in the cash conversion cycle is 117 - 85 days, i.e. = 32 days.

Explanation:

The CCC has decreased by 32 days in the new scenario. This is an improvement worth pursuing by management.

CCC as a measure of management effectiveness is best obtained for many years in order to compare internally.

Another way it serves as a good measure is to compare the company's CCC with its competitors'.

8 0

3 years ago

Alpha Ltd has appointed you as a manager in the budgeting department. The company has provided the following information to prep

nasty-shy [4]

Answer and Explanation:

The preparation of the cash flow budget is presented below:

Cash Flow Budget

Particulars Jan 2021 Feb 2021 Mar 2021 Apr 2021 May 2021 Jun 2021

Opening Balance $1,000 $1,400 $2,000 $4,600 $8,300 $11,700

Sales $4,000 $4000 $6,000 $7,500 $7,500 $7,500

(2,000 × 2) (2,000 × 2) (2,000 × 3) (2,500 × 3) (2,500 × 3) (2,500 × 3)

Total Cash Inflow $5,000 $5,400 $8,000 $12,100 $15,800 $19,200

Less: Cash payments

Less: Bonus to employees $1,000 $800 $800 $800 $1,500 $1,500

(5,000 × 20% ) (4,000 × 20% ) (4,000 × 20% ) (4,000 × 20% ) (7,500 × 20% ) (7,500 × 20% )

Less: Overhead Cost 2,000 2,000 2,000 2,000 2,000 2,000

Less: Direct material & Direct Labor 500 500 500 500 500 500

Less: Fixed Cost 100 100 100 100 100 100

Net cash generated (A) 400 600 600 4100 3400 3400

Opening Cash balance (B) 1000 1400 2000 2600 6700 10100

Closing Balance (A+B) 1400 2000 4600 8300 11700 15100

Balance as on 30 June 2021 = 15100

We simply deduct all cash payments from the all cash receipts so that the ending balance or closing balance could come

3 0

3 years ago

A $1,000 face value bond is currently quoted at 101.2. the bond pays semiannual payments of $28.50 each and matures in six years

goblinko [34]

Coupon rate is the yearly interest earned by a loan and it can be calculated with

$C = \frac{i}{p}$

where i is the annual interest and p is the par value of the bond or the initial loan amount.

For this particular case, since the semiannual payment is $28.50, then the annual payment is 2 x 28.50 = $57.00.

Thus, we have

$C = \frac{57}{1000} = 0.057$

From this, the coupon rate is 0.057 x 100% = 5.7%.
Answer: 5.7%

7 0

3 years ago

What is a trailing stop loss

Sveta_85 [38]

A trailing stop-loss order is a special type of trade order where the stop-loss price is not set at a single, absolute dollar amount, but instead is set at a certain percentage or a certain dollar amount below the market price. A trailing stop-loss is sometime referred to simply as a trailing stop.

4 0

3 years ago

Read 2 more answers

You deposit $5,000 per year at the end of each of the next 25 years into an account that pays 8% compounded annually. How much

Volgvan

Answer:

The correct answer is A. $18,276

Explanation:

First you have to calculate how much you'd end up having at the end of the 25 years period in your savings account.

You calculate the total amount saved for each year, using the formula:

$S_{n} = S_{n-1} *(1+r)+D$

Where

$S_{n}$ is the total amount in the savings account for this period.

$S_{n-1}$ is the total amount in the savings account from the previous period.

$r$ is the interest rate.

$D$ are the annual deposits being made into the savings account.

Therefore for the first year you'd do:

$S_{1} = S_{0} *(1+r)+D$

$S_{1} = 0*(1+0.08)+5000=5000$

For the second year:

$S_{2} = S_{1} *(1+r)+D$

$S_{2} = 5000*(1+0.08)+5000=10400$

And so on. You can help yourself calculate the value of this series using programs like Excel.

I have attached an Excel file that has a table with the savings values for each of the 25 years.

So, the 25th year you’ll have $365,529.70 in your savings account. Now you simply divide this number by 20 (that will be the number of years you’ll be withdrawing the same dollar amount from your savings account):

$Withdrawals = 365,529.70/20=18,276.485$

In conclusion, you’d be able to withdraw $18,276.485 each year for the following 20 years after the 25th deposit, if all withdrawals are the same dollar amount.

Download xlsx

3 0

3 years ago

Planing function means​

Planing function means