Problem:
Marshall Inc. recently hired your consulting firm to improve the company's performance. It has been highly profitable bu has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm's cash conversion cycle.
Required:
Question: Using the following information and a 365-day year, what is the firm's present cash conversion cycle?
- Average inventoy= 75,000
- Annual sales= 600,000
- Annual cost of goods sold= 360,000
- Average accounts receivable= 160,000
- Average accounts payable= 25,000
Note: Show supporting computations in good form.