Question 1

A firm is said to be an early stage venture when it is in which of the following except?

Accepted Answer

Early stage ventures refer to the initial stages of a firm's life cycle when it is in the startup and development stages. It has not yet achieved significant growth, stability, or long-term sustainability, and it is still in the process of establishing its market presence and generating a customer base. Rapid growth, survival, and early-maturity stages are all stages that occur after the startup and development stages, indicating that the firm is no longer in its early stage venture phase. Therefore, the best choice is E) early-maturity stage.

Question 2

A venture's cash conversion cycle will decrease if the purchase-to-payment conversion period increases.

Accepted Answer

The answer of A venture's cash conversion cycle will decrease...

Question 3

Seed financing is generally associated with which one of the following life cycle stages:

Accepted Answer

The answer of Seed financing is generally associated with which...

Question 4

Calculate the inventory-to-sale conversion period based on the following information:average inventories = $120,000; average receivables = $90,000; average payables = $40,000; cost of goods sold = $182,500; and net sales = $365,000.

Accepted Answer

The answer of Calculate the inventory-to-sale conversion period based on...

Question 5

Which of the following measures the average time it takes a firm to complete its operating cycle after deducting the days supported by trade credit and delayed payroll financing?

Accepted Answer

The cash conversion cycle measures the time it takes for a company to convert its resources into cash flow. It takes into account the inventory-to-sale conversion period, sale-to-cash conversion period, and purchase-to-payment conversion period, but deducts the days supported by trade credit and delayed payroll financing to give a more accurate measure of the firm's operating efficiency.

Question 6

Which one of the following conversion periods is not a component in the cash conversion cycle?

Accepted Answer

The fixed assets-to-usage conversion period is not a component in the cash conversion cycle as it does not involve the conversion of any cash into another asset or into revenue. The inventory-to-sale conversion period, sale-to-cash conversion period, and purchase-to-payment conversion period are all important components in the cash conversion cycle.

Question 7

Based on the following information,determine the venture's cash conversion cycle: Inventory-to-sale conversion period = 112.9 days; Sale-to-cash conversion period= 57.1 days; and Purchase-to-payment conversion period = 76.8 days.

Accepted Answer

The answer of Based on the following information,determine the venture's...

Question 8

Based on the following information,determine the average receivables (rounded to thousands of dollars)that were outstanding: Net sales = $575,000; Sale-to-cash conversion period = 57.1 days; Purchase-to-payment conversion period = 76.8 days; and Cost of goods sold = $380,000.

Accepted Answer

The answer of Based on the following information,determine the average...

Question 9

First-round financing is generally associated with which one of the following life cycle stages:

Accepted Answer

The answer of First-round financing is generally associated with which...

Question 10

Calculate the sale-to-cash conversion period based on the following information:average inventories = $120,000; average receivables = $90,000; average payables = $40,000; cost of goods sold = $182,500; and net sales = $365,000.

Accepted Answer

Sale-to-cash conversion period = (Average Inventories + Average Receivables - Average Payables) / Cost of Goods Sold x 365

= ($120,000 + $90,000 - $40,000) / $182,500 x 365

= 170,000 / $182,500 x 365

= 0.9342 x 365

= 340.25

Therefore, the sale-to-cash conversion period is 90.0 days (rounded to one decimal place).

Question 11

Determine the cash conversion cycle based on the following information:inventory-to-sale conversion period = 112.9 days; sale-to-cash conversion period = 57.1 days; and purchase-to-payment conversion period = 76.8 days.

Accepted Answer

The answer of Determine the cash conversion cycle based on...

Question 12

Which of the following is not part of the operating cycle?

Accepted Answer

The operating cycle consists of four parts: (1) the time it takes to purchase inventory, (2) the time it takes to produce the product, (3) the time it takes to sell the product, and (4) the time it takes to collect payment from customers. The time it takes to pay suppliers is not a part of the operating cycle but can be considered a part of the cash conversion cycle.

Question 13

Which one of the following "measures" the average days of sales committed to the extension of trade credit?

Accepted Answer

The answer of Which one of the following "measures" the...

Question 14

Which of the following is measured by dividing the average daily cost of goods sold into the average inventory?

Accepted Answer

This is the formula for the inventory turnover ratio, which measures how efficiently a company is managing its inventory. A higher ratio indicates a company is selling its products more quickly and efficiently, while a lower ratio may indicate slow-moving or obsolete inventory.

Question 15

Which one of the following conversion periods operates to reduce the length of the cash conversion cycle?

Accepted Answer

The answer of Which one of the following conversion periods...

Question 16

Which of the following measures the average time from purchase of materials and labor to actual cash payment?

Accepted Answer

The purchase-to-payment conversion period measures the average time between the purchase of materials and labor to actual cash payment. This metric is important for a company's working capital management as it shows how long funds are tied up in inventory and pending payments. Options A, B, and D measure other aspects of the cash conversion cycle.

Question 17

Based on the following information,determine the venture's inventory-to-sale conversion period: cash conversion cycle = 250 days; sale-to-cash conversion period = 60 days; and purchase-to-payment conversion period = 70 days.

Accepted Answer