onsider the case of Jealous Leopard Trading Company: Jealous Leopard Trading Company is a mature firm that has a stable flow of business. The following data was taken from its financial statements last year: Annual sales $10,200,000 Cost of goods sold $8,160,000 Inventory
Cash conversion cycle
Consider the case of Jealous Leopard Trading Company:
Jealous Leopard Trading Company is a mature firm that has a stable flow of business. The following data was taken from its financial statements last year:
|
Annual sales |
$10,200,000 |
|
Cost of goods sold |
$8,160,000 |
|
Inventory |
$3,100,000 |
|
Accounts receivable |
$2,200,000 |
|
Accounts payable |
$2,500,000 |
Leopard Trading’s CFO is interested in determining the length of time funds are tied up in
Inventory conversion period (days)
Average collection period (days)
Payables deferral period (days)
Cash conversion cycle (days)
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