Cash conversion cycle
American Products is concerned about managing cash efficiently. On the? average, inventories have an age of 85 ?days, and accounts receivable are collected in 54 days. Accounts payable are paid approximately 33 days after they arise. The firm has annual sales of about ?$40 million. Cost of goods sold are ?$22 ?million, and purchases are ?$16 million.
a. Calculate the? firm's operating cycle.
b. Calculate the? firm's cash conversion cycle.
c. Calculate the amount of resources needed to support the? firm's cash conversion cycle.
d. Discuss how management might be able to reduce the cash conversion cycle.
Round all answers two decimal places