Question

Cash Conversion Cycle. Calculate the (a) accounts receivable period, (b) accounts payable period, (c) inventory period, and (d) cash conversion cycle for the following firm:

Income Statement Data:

            Sales                            5,000

            Cost of goods sold      4,200

           

Balance sheet data:

	Beginning of Year	End of Year
Inventory	500	600
Accounts receivable	100	120
Accounts payable	250	290

1. Calculate the accounts receivable period:

Response (show formula and numerical values):

2. Calculate the accounts payable period

Response (show formula and numerical values):

3. Calculate the inventory period

Response (show formula and numerical values):

4. Calculate the cash conversion cycle

Response (show formula and numerical values):

Answer 1