Question: Sharam Industries has a 120-day operating cycle. If its average age of inventory is 50 days, how long is its average collection period? If its

Sharam Industries has a 120-day operating cycle. If its average age of inventory is 50 days, how long is its average collection period? If its average payment period is 30 days, what is its cash conversion cycle? Place all of this information on a time line similar to Figure.

Time = 62.3 days Operating Cycle (OC) Purchase Raw Materials on Account Collect Accounts Sell Finished Goods Average Age of on Account Inventory lAl) Average Collection Period (ACP 44.8 days Pay 17.5 days Accounts Cash Payable Inflow Cash Conversion Cycle (CCC Average Payment Period (APP 51.2 days 11.1 days Cash Outflow Time

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