Cash conversion cycle: Renald Company estimates that it takes the company 27 days on average to pay off its suppliers. It also knows that it has days' sales in inventory of 43 days and days sales' outstanding of 45 days. What is its cash conversion cycle?
A) 61 days
B) 115 days
C) 57 days
D) 46 days

Question

Quizplus · Accepted Answer

The cash conversion cycle is calculated as Days Sales Outstanding (45) + Days Sales in Inventory (43) - Days Payable Outstanding (27) = 61 days.

Cash Conversion Cycle: Renald Company Estimates That It Takes the Company