What Is the Length of the Cash Conversion Cycle for a Firm

question 58

Essay

What is the length of the cash conversion cycle for a firm with $50,000 in inventory, $60,000 in average receivables, $30,000 in average payables, annual sales of $700,000, and a cost of goods sold of 75%?

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Definitions:

Negatively Skewed

A distribution of data where the tail on the left side of the distribution is longer or fatter than the right side, indicating that the bulk of the values lie to the right of the mean.

Distribution

The way in which something is shared out among a group or spread over an area, also used in statistics to describe the spread of values in a dataset.

Kurtosis

A statistical measure that describes the shape of a distribution's tails in relation to its overall shape, indicating the degree of outlier prominence.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the values are from the mean.