Log in

View Full Version : Accounting


allenmckinley
Jan 24, 2011, 10:25 PM
How deos borrrowing 1 million short term and investing affects cash?

Alty
Jan 24, 2011, 10:36 PM
Please stop posting the same question over and over again.

We all volunteer here, we all have lives, so it can take some time for the right expert to come online to answer your question. A little patience please.

I've asked the mods to merge your posts as they're all the same question. You only need to ask it once and then wait.

Thank you.

allenmckinley
Jan 24, 2011, 11:07 PM
A new computer system allows your firm to more accurately monitor inventory and anticipate future inventory shortfalls. The firms feels more able to pare down its inventory level. What affect will the new system have on working capital and on the cash conversion cycle? Is the correct answer the firm will have more cash on hand to purchase inventory. Thus leaving more working capital.

Just Looking
Jan 25, 2011, 12:18 AM
First question
Is this question also related to inventory, as in investing in inventory, or are you referring to investing in securities, land, building, fixed assets, or something else? I feel like this question is incomplete. We won't just give you homework answers, but will review what you write and give you guidance. If your question is complete as asked, think about the entries that will be made. How is cash involved?
https://www.askmehelpdesk.com/finance-accounting/announcement-font-color-ff0000-u-b-read-first-expectations-homework-help-board-b-u-font.html

Second question
working capital = current assets - current liabilities

Both cash and inventory are current assets. Think along the lines of why you would rather have cash. What are some of the problems of having too much inventory? How does that affect working capital?

You haven't addressed the cash conversion cycle. Do you understand what it is?