Consider the following financial statement information for the Bulldog Icers Corporation: How long is the cash cycle?

Question

Consider the following financial statement information for the Bulldog Icers Corporation:  How long is the cash cycle?

Quizplus · Accepted Answer

Inventory turnover = $58,638/[($9,338 + $11,442)/2] = 5.6437 timesInventory period = 365/5.6437 = 64.67 daysReceivables turnover = $91,544/[($5,670 + $6,947)/2] = 14.5112 timesReceivables period = 365/14.5112 = 25.15 daysPayables turnover = $58,638/[($7,689 + $9,421)/2] = 6.8542 timesPayables period = 365/6.8542 = 53.25 daysCash cycle = 64.67 + 25.15 - 53.25 = 36.6 days

Consider the Following Financial Statement Information for the Bulldog Icers