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Cash Conversion Cycle

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The Zocco Corporation has an inventory conversion period of 75 days, a receivables collection period of 38 days, and a payables deferral period of 30 days.

a. What is the length of the firm's cash conversion cycle?
b. If Zocco's annual sales are $3,421,875 and all sales are on credit, what is the firm's investment in accounts receivable?
c. How many times per year does Zocco turn over its inventory?

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Solution Summary

Provides steps to calculate the length of the firm's cash conversion cycle, the firm's investment in accounts receivable and times per year that the firm turns over its inventory.

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Cash Conversion Cycle
The Zocco Corporation has an inventory conversion period of 75 days, a receivables collection period of 38 days, and a payables deferral period of 30 days.

a. What is the length of the firm's cash conversion cycle?
Cash conversion ...

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