Use the table for the question(s)below.
Luther Industries had sales of $980 million and a cost of goods sold of $560 million in 2019.A simplified balance sheet for the firm appears below:
Luther Industries
Balance Sheet
As of December 31,2019
(millions of dollars)
-Luther's cash conversion cycle is closest to:
A)51 days.
B)66 days.
C)71 days.
D)129 days.

Question

Use the table for the question(s)below.
Luther Industries had sales of $980 million and a cost of goods sold of $560 million in 2019.A simplified balance sheet for the firm appears below:
Luther Industries
Balance Sheet
As of December 31,2019
(millions of dollars) 
-Luther's cash conversion cycle is closest to:
A)51 days. 
B)66 days. 
C)71 days. 
D)129 days.

Quizplus · Accepted Answer

Luther's cash conversion cycle is 51 days. This is calculated by adding the days inventory outstanding (30 days) to the days sales outstanding (21 days).

Use the Table for the Question(s)below