Answer to Question #24016 in Finance for Nancy Day

Question #24016
I am so lost in all of this. can somone help me? b. What will be the impact on its net investment in working capital in 2012 if Robinson is able to reduce its collection period by five days, its inventory period by six days, and increase its payment period by two days? New Sales Sales/day New COGS COGS/day Estimated AR if reduced by 5 days Old collection period 93.58 New collection period 88.58 New AR estimate 5 Estimated Inventory if conversion period reduced by 6 days COGS/day Old conversion period New conversion period New inventory estimate Estimated AP if payment period increased by 2 days COGS/day Old payment period New payment period New AP estimate 2012 working capital Did the working capital increase or decrease from part a? Robinson expects its 2012 sales and cost of goods sold to grow by 20 percent over their 2011 levels. a. What will be the affect on its levels of receivables, inventories, and payments if the components of its cash conversion cycle remain at their 2011 levels? What will be its net investment in working capital? Receivables Inventories Payments Net investment in working capital New Sales Sales/day New COGS COGS/day b. What will be the impact on its net investment in working capital in 2012 if Robinson is able to reduce its inventory period by ten days? Estimated AR if reduced by 0 days Sales/day Old collection period New collection period New AR estimate Estimated Inventory if conversion period reduced by 10 days COGS/day Old conversion period New conversion period New inventory estimate Estimated AP if payment period increased by 0 days COGS/day Old payment period New payment period New AP estimate 2012 working capital Did the working capital increase or decrease from part a?
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