Q-Tip Devices is evaluating changes to its working capital strategy to optimize its cash conversion cycle. Q-Tip's sales last year were $150,000 (all on credit), and it earned a net profit of 8%. Its inventory turnover was 6.25 times during the year, and its Days Sales Outstanding (DSO) was 28 days. The annual cost of goods sold was $135,000. The firm had fixed assets totaling $30,000. Q-Tip's payables deferral period is 36 days. Assume 365 days in a year for calculations. Do not round intermediate steps. Calculate Q-Tip's cash conversion cycle. Round your final answer to two decimal places.

Q-Tip Devices is evaluating changes to its working capital strategy to optimize its cash conversion cycle. Q-Tip's sales last year were $150,000 (all on credit), and it earned a net profit of 8%. Its inventory turnover was 6.25 times during the year, and its Days Sales Outstanding (DSO) was 28 days. The annual cost of goods sold was $135,000. The firm had fixed assets totaling $30,000. Q-Tip's payables deferral period is 36 days. Assume 365 days in a year for calculations. Do not round intermediate steps. Calculate Q-Tip's cash conversion cycle. Round your final answer to two decimal places.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 12P: Strickler Technology is considering changes in its working capital policies to improve its cash flow...

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