Cash Conversion Cycle. Company X is concerned about managing cash efficiently. On the average, inventories have an ago of 90 days, and accounts receivable are collected in 60 days. Accounts payable are paid approximately 30 days after they arise. the firm has annual sales of about $30 million. Cost of goods sold are $20 million, and purchases are $15 million.
-What is the firms operating cycle?
-What is the firms cash conversion cycle?
-Calculate the amount of resources needed to support the firm's cash conversion cycle
-how might management be able to reduce the cash conversion cycle?