Your Boss Asks You to Compute the Company's Cash Conversion

question 58

Multiple Choice

Your boss asks you to compute the company's cash conversion cycle. Looking at the financial statements, you see that the average inventory for the year was $126,300, accounts receivable were $97,900, and accounts payable were at $115,100. You also see that the company had credit sales of $324,000 and that cost of goods sold was $282,000. What is your firm's cash conversion cycle? Round to the nearest day.

• A) 119 days
• B) 34 days
• C) 57 days
• D) 125 days

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Definitions:

Key Feature

A distinctive attribute or aspect that is critical or essential to the understanding or functioning of something.

Potential Scrutiny

The likelihood or possibility of being examined or investigated closely, often in a critical manner.

Ego-Syntonic

Pertaining to thoughts, impulses, and behaviors that are consistent with the self-image of an individual, often seen in conditions like Obsessive Compulsive Disorder.

Ego-Dystonic

Refers to thoughts, impulses, and behaviors that are felt to be repugnant, distressing, unacceptable, and inconsistent with one's self-concept.