Twin Peaks Industries has an inventory turnover of 111 days, an Accounts Payable turnover of 77 days and an Accounts Receivable turnover of 79 days. Twin Peaks' cash conversion cycle is:

Question

Quizplus · Accepted Answer

The cash conversion cycle (CCC) is a metric used to measure the time it takes for a company to convert its investments in inventory and accounts receivable into cash.

CCC = Inventory turnover + Accounts Receivable turnover - Accounts Payable turnover

Substituting the given values:

CCC = 111 + 79 - 77 
CCC = 113 days

Therefore, the correct answer is A) 113 days.

Twin Peaks Industries Has an Inventory Turnover of 111 Days