ML has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 50 days Average collection period = 17 days Payables deferral period = 25 days O 34 days O 46 days O 31 days O 38 days 42 days

ML has the following data. What is the firm's cash conversion cycle? Inventory conversion period = 50 days Average collection period = 17 days Payables deferral period = 25 days O 34 days O 46 days O 31 days O 38 days 42 days

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

ML has the following data. What is the firm's cash conversion cycle?
Inventory conversion period = 50 days
Average collection period = 17 days
Payables deferral period = 25 days
34 days
46 days
31 days
38 days
O 42 days

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BMC Co. has an average A/R balance of P1,250,000, average inventory balance of P1,750,000, and average accounts payable balance of P800,000. Its annual sales are P12,000,000 and its cost of goods sold represents 80% of annual sales. Assume there are 365 days in a year. What is BMC Co.’s cash conversion cycle? A. 53.23 days B. 60.83 days C. 72.28 days D. 84.15 days E. 100.55 days
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