Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and an accounts payable turnover of 40 days. Casey's cash conversion cycle is:

Question

Quizplus · Accepted Answer

Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding

Days Inventory Outstanding = 77 days
Days Sales Outstanding = 36 days
Days Payable Outstanding = 40 days

Cash Conversion Cycle = 77 + 36 - 40
Cash Conversion Cycle = 73 days

Casey Company Has an Accounts Receivable Turnover of 36 Days