Suppose that the inventory period is 50 days, the accounts receivable period is 40 days, and the cash cycle is 55 days. What is the accounts payable period?

Question

Quizplus · Accepted Answer

The cash cycle is calculated as the inventory period plus the accounts receivable period minus the accounts payable period. Given the cash cycle (55 days), inventory period (50 days), and accounts receivable period (40 days), we can solve for the accounts payable period: 55 = 50 + 40 - Accounts Payable Period. Therefore, the accounts payable period is 35 days.

Suppose That the Inventory Period Is 50 Days, the Accounts