Peter's Pool House has an interval measure of 51. This means that the Pool House has:
A) To replace its inventory every 51 days.
B) To wait for 7.16 days to collect its receivables after a sale is made.
C) Enough cash to pay for 51 days of operating expenses.
D) Sufficient current assets to operate the business for 7.16 days.
E) Sufficient current assets to operate the business for 51 days.

Question

Quizplus · Accepted Answer

An interval measure of 51 indicates the number of days the company can continue to operate using its current assets without needing additional financing. This means Peter's Pool House has enough current assets to cover its operating expenses for 51 days.

Peter's Pool House Has an Interval Measure of 51