Explore BrainMass

Explore BrainMass

    Cash Conversion Cycle: AR period, AP period, inventory period

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    See attached file.

    Cash Conversion Cycle. Calculate the accounts receivable period, accounts payable period, inventory period, and cash conversion cycle for the following firm:

    Income statement data:
    Sales 5,000
    Cost of goods sold 4,200
    Balance sheet data:

    See the table in the attachment.

    © BrainMass Inc. brainmass.com March 4, 2021, 6:19 pm ad1c9bdddf
    https://brainmass.com/business/management-accounting/cash-conversion-cycle-ar-period-ap-period-inventory-period-39892

    Attachments

    Solution Preview

    Accounts receivable period = Average receivables /Sales * 365
    = ((100+120)/2)*365/5000 = 8.03 ...

    Solution Summary

    The solution shows all the calculations that were used to arrive at the correct answers.

    $2.49

    ADVERTISEMENT