The inventory turnover for the Sneeky Company is 8 times and its days sales outstanding is 55. The average payables deferral period (or turnover) is 7.5. What is the cash cycle for Sneeky given a 365-day year.
A) 149.29.
B) 51.96.
C) 58.04.
D) 115.00.

Question

Quizplus · Accepted Answer

The cash cycle is calculated as (365 / inventory turnover) + (days sales outstanding) - (average payables deferral period). Therefore, the cash cycle for Sneeky is (365 / 8) + 55 - 7.5 = 149.29 days.

The Inventory Turnover for the Sneeky Company Is 8 Times