Polyana Shoe Store
The Polyana Shoe Store had sales last year of $50,000,000 based upon a cost of goods sold of $40,000,000. Polyana also has inventory, accounts receivable, and accounts payable of $5,000,000, $7,000,000, and $9,000,000, respectively.

-If Polyana were to increase its gross profit margin during the previous year,without changing its accounts receivable level,then what would have happened to Polyana's cash conversion cycle?

Question

Polyana Shoe Store
The Polyana Shoe Store had sales last year of $50,000,000 based upon a cost of goods sold of $40,000,000. Polyana also has inventory, accounts receivable, and accounts payable of $5,000,000, $7,000,000, and $9,000,000, respectively.

-If Polyana were to increase its gross profit margin during the previous year,without changing its accounts receivable level,then what would have happened to Polyana's cash conversion cycle?

Quizplus · Accepted Answer

Sales increase but CGS remains the same: ACP would then decrease which would cause the CCC to decrease.

Polyana Shoe Store The Polyana Shoe Store Had Sales Last Year of $50,000,000