Question

Consider this data for Galaxy Wholesalers Incorporated and use it to complete the table: Selected Financial...

Consider this data for Galaxy Wholesalers Incorporated and use it to complete the table:

Selected Financial Data for Galaxy Wholesalers Incorporated
Average cash $32,813
Average accounts payable $440,000
Average accounts receivable $787,500
Average inventories $393,750
Average cash sales $2,625,000
Average credit sales $7,875,000
Average cost of goods sold $4,725,000
Average number of days per year 365 days
Inventory conversion period 30.42 days
Payables deferral period ____.____days
Receivables conversion period ____.____days
Cash conversion cycle ____.____days
Business   Accounting   
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Answer #1
Payables deferral period Receivables conversion period Inventory conversion period

= 365 days (Average accounts payable / COGS)

= 365 (440,000 / 4,725,000)

= 33.99 days

= 365 days (Average accounts receivables / Sales)

= 365 (787,500 / 7,875,000)

= 36.5 days

= 365 days (Average Inventory / COGS)

= 365 (393,750 / 4,725,000)

= 30.42 days

.

Cash conversion cycle ($)
Inventory conversion period 30.42
Receivables conversion period 36.5
Payables deferral period (33.99)
Cash conversion cycle 32.93
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