The Bobblehead Company has an Accounts Receivable turnover of 36 days,an inventory turnover of 77 days and an Accounts Payable turnover of 40 days.Bobblehead's cash conversion cycle is:

Question

Quizplus · Accepted Answer

Cash conversion cycle can be calculated using the formula: 
CCC = Inventory conversion period + Receivables collection period - Payables deferral period

Given, 
Accounts Receivable turnover = 36 days 
Inventory turnover = 77 days 
Accounts Payable turnover = 40 days

Receivables collection period = 36 days 
Inventory conversion period = 77 days 
Payables deferral period = 40 days

Therefore, 
CCC = 77 + 36 - 40 
CCC = 73 days

Hence, the correct choice is C) 73 days.

The Bobblehead Company Has an Accounts Receivable Turnover of 36