Cash conversion cycle
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Desai Inc. has the following data, in thousands. Assuming a 365-day year, what is the firm's cash conversion cycle?
Annual sales = $45,000
Annual cost of goods sold = $30,000
Inventory = $4,500
Accounts receivable = $1,800
Accounts payable = $2,500
a. 28 days
b. 32 days
c. 35 days
d. 39 days
e. 43 days
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Solution Summary
This post shows how to calculate cash conversion cycle.
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accounts receivable period = Average receivables /Sales * 365
= 1800*365/45000 = 14.6 ...
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