Stewart and Company currently has a production cycle of forty days, a collection cycle of twenty days,

Question:

Stewart and Company currently has a production cycle of forty days, a collection cycle of twenty days, and a payment cycle of fifteen days. What are Stewart’s current business operating cycle and cash conversion cycle? If Stewart and Company wants to reduce its cash conversion cycle to thirty-five days what action can it take?

Cash Conversion Cycle
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,...