Casa de Diseo Case Study Example | Topics and Well Written Essays - 750 words

Casa de Diseo - Case Study Example riod by offering credit terms of 3/10 net 60, what additional savings in resource investment costs will result for the shortened cash conversion cycle, assuming that the level of sales remains constant? If the firm’s variable cost of $40,000,000 in sales is 80%, determine the reduction in average investment in accounts receivable and the annual savings that will result from this reduced investment, assuming that sales remain constant. Teresa Leal should continue focusing on how the company can reduce the accounts receivable (money customers owe the company), a move that will automatically reduce the bad debt expense. The company should continue with its new strategy of offering cash discounts since the analysis has confirmed that it is a wise idea. However, the company’s management should also focus on how it can reduce the cost of offering cash discounts since it appears as if it is still relatively high (Fernandes,