What Is the Cash Conversion Cycle for a Firm with a Receivables

question 7

Multiple Choice

What is the cash conversion cycle for a firm with a receivables period of 40 days, a payables period of 30 days, and an inventory period of 60 days?

• A) 10 days
• B) 50 days
• C) 70 days
• D)130 days

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Definitions:

Non-controlling Interest

A shareholder's equity in a subsidiary that is not attributable to the parent company, representing minority ownership.

Consolidated Net Income

The total earnings of a corporation, after tax, including earnings from subsidiaries, before distributing dividends.

Cost Method

An accounting approach where investments are recorded at their acquisition cost, without adjustment for increases or decreases in market value.

Goodwill

An intangible asset arising when a company acquires another for more than the fair value of its net identifiable assets.