Hi this is one question. The excel sheet is the data to answer the question 9Why would an increase in the company's days in A/P produce cash for a business?The company is collecting on its credit sales faster.This is a non-cash item on the balance sheet, and therefore not applicable.The company is 'stretching its payables' and deferring a cash outflow.The company is selling more product at a quicker pace, and therefore experiencing cash inflows. Quarterly Working Capital ScheduleAll figures in USD thousands unless statedDays in PeriodRevenueCOGSAMOUNTS PER DAYAccounts ReceivableInventoryTOTAL AMOUNTSAccounts ReceivableInventory(Days)(Days)2021Q191.251092,4871,1352021Q291.251092,5791,1652021Q391.251092,6881,1962021Q491.2512 113,3891,6102022Q191.2512113,4571,6622022Q291.2512113,5261,7152022Q391.2512113,5791,7602022Q491.2512 113,6151,806

Accounts payable are current liabilities for the business. Accounts payable results in cash…

Quarterly Working Capital Schedule All figures in USD thousands unless stated Days in Period Revenue COGS MOUNTS PER DAY Accounts Receivable Inventory OTAL AMOUNTS Accounts Receivable Inventory (Days) (Days) 2021 Q1 91.25 10 9 2,487 1,135 2021 Q2 91.25 10 9 2,579 1,165 2021 Q3 91.25 10 9 2,688 1,196 2021 Q4 91.25 12 11 3,389 1,610 2022 Q1 91.25 12 11 3,457 1,662 2022 Q2 91.25 12 11 3,526 1,715 2022 Q3 91.25 12 11 3,579 1,760 2022 Q4 91.25 12 11 3,615 1,806

Quarterly Working Capital Schedule All figures in USD thousands unless stated Days in Period Revenue COGS MOUNTS PER DAY Accounts Receivable Inventory OTAL AMOUNTS Accounts Receivable Inventory (Days) (Days) 2021 Q1 91.25 10 9 2,487 1,135 2021 Q2 91.25 10 9 2,579 1,165 2021 Q3 91.25 10 9 2,688 1,196 2021 Q4 91.25 12 11 3,389 1,610 2022 Q1 91.25 12 11 3,457 1,662 2022 Q2 91.25 12 11 3,526 1,715 2022 Q3 91.25 12 11 3,579 1,760 2022 Q4 91.25 12 11 3,615 1,806

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter23: Other Topics In Working Capital Management

Section: Chapter Questions

Problem 4Q

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