Abbot Corporation has an average collection period of 49 days, an inventory conversion period of 83 days, and a payables deferral period of 36 days. What is Abbott's cash conversion cycle?
A) 96 days
B) 70 days
C) 85 days
D) 132 days

Question

Quizplus · Accepted Answer

The cash conversion cycle is calculated as the sum of the average collection period and the inventory conversion period minus the payables deferral period. Therefore, it's 49 days + 83 days - 36 days = 96 days.

Abbot Corporation Has an Average Collection Period of 49 Days