Sereneva has an inventory turnover ratio of 52, an accounts receivable balance of $365,000, average daily credit sales of $36 500, accounts payable of $182 500 and cost of goods sold of $7 993 500.What is Sereneva's cash conversion cycle to the nearest day?
A)17 days
B)9 days
C)27 days
D)-27 days

Question

Quizplus · Accepted Answer

The cash conversion cycle (CCC) is calculated as Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) - Days Payable Outstanding (DPO). DIO = 365/52 = 7 days. DSO = $365,000 / $36,500 = 10 days. DPO = $182,500 / ($7,993,500/365) = 8 days. CCC = 7 + 10 - 8 = 9 days.

Sereneva Has an Inventory Turnover Ratio of 52, an Accounts