A3. Cash Conversion Cycle

A3. (Cash Conversion Cycle)

Corporate Financial Management (3rd Edition)
Emery, Douglas R., Finnerty, John D., & Stowe, John D. (2007)

Individual assignment: Text Problem Set
Chapter Problems

A3. (Cash conversion cycle) Dennis Lasser has collected some information about a food wholesaler in order to estimate its cash conversion cycle. The accumulated information is given. What will Dennis find the cash conversion cycle to be?

Inventory turnover = 10x Inventory conversion period = 365/10 = 36.5 days
Receivables turnover = 20x Receivables collection period = 365/20 = 18.25 days
Payables turnover = 25x Payables deferral period = 365/25 = 14.6 day

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