Wolfgang Electricals estimates that the company takes 31 days on average to pay off its suppliers. It also knows that it has days' sales in inventory of 54 days and days sales' outstanding of 34 days. What is its cash conversion cycle?

Question

Quizplus · Accepted Answer

The cash conversion cycle (CCC) can be calculated as:

CCC = Days inventory outstanding + Days sales outstanding - Days payable outstanding

Substituting in the given values:

CCC = 54 + 34 - 31 
CCC = 57

Therefore, the answer is (C) 57 days.

Wolfgang Electricals Estimates That the Company Takes 31 Days on Average