[j3cpa]

Marsh, Inc., is experiencing a sharp increase in credit sales activity and has, therefore, had a steady increase in production. Management has also adopted an aggressive working capital policy by decreasing the inventory conversion period and holding the receivables collection period and the payables deferral period constant. Original inventory levels were higher than accounts receivable. Therefore, the company’s current level of net working capital: would most likely be lower than under other business conditions in order that the company can maximize profits while minimizing working capital investment.

I went over the ICP, PDP, ARCP, and CCC for the past hour and for the live of me I can’t understand the concepts to answer this question. I understand CCC fairly well too by now but I am still stumbling. Can you do a ELI5 for me please?

Thanks

I did it. You can too!

Study Material:
GLEIM
BEC - FEB/2012
AUD - FEB/2012
FAR - JULY/2012
REG - JULY/2012