What is Ned's cash cycle at the end of the ﬁrst quarter?

Question

Quizplus · Accepted Answer

The cash cycle is the time it takes for a company to convert its inventory into cash. Ned's cash cycle at the end of the first quarter is 40 days. This is calculated as follows:Days Sales Outstanding (DSO) = 30 daysDays Inventory Outstanding (DIO) = 10 daysDays Payable Outstanding (DPO) = 0 daysCash Cycle = DSO + DIO - DPOCash Cycle = 30 days + 10 days - 0 daysCash Cycle = 40 days

What Is Ned's Cash Cycle at the End of the ﬁRst