ABC Company had a net sales of $260mn in 2023, and typically 75% of sales are on credit (i.e. non-cash). Gross, EBIT and EBITDA margins of ABC in 2023 stood at 25%, 16%, and 26%, respectively (assume depreciation in Opex is zero).
Receivables, inventories and payables as of end_2022 and end_2023 were as follows:
$mn
end_2022
end_2023
Receivables
57
73
Inventories
43
61
Payables
31
47
For each of the questions below, show your calculations explicitly.
i) Calculate the acc.receivables turnover in 2023 (4 pts)
ii) Calculate the inventories turnover in 2023 (4 pts)
iii) Calculate the acc. payables turnover in 2023 (4 pts)
iv) What is the operating cycle (days) in 2023? (4 pts)
v) What is the cash conversion cycle (days) in 2023? (4 pts)