If a firm has a cash cycle of 10 days and an operating cycle of 43 days, what is its payables turnover?
A) 11.06
B) 36.5
C) 8.48
D) 33

Question

Quizplus · Accepted Answer

The payables turnover is calculated by dividing the number of days in the period by the payables period. The payables period is the difference between the operating cycle and the cash cycle, which is 43 - 10 = 33 days. Therefore, the payables turnover is 365 / 33 = 11.06.

If a Firm Has a Cash Cycle of 10 Days