Attempts Keep the Highest/5 3. Cash conversion cycle Green Melon Electronics Company is a mature firm that has a stable Pow of business. The following data was taken from its financial statements lost year: Annual sales Cost of goods sold Inventory Accounts receivable 59,700,000 $6,305,000 $3,100,000 $2,100,000 $2,800,000 Accounts payable Green Melon's CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to answer the following questions. (Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places) What is the value of the Inventory conversion period? 179.46 days 59.72 days 47.15 days 53.43 days Both the inventory conversion period and payables deferral period use the average dally COGS in their denominators, whereas the average collection period uses average dally sales in its denominator. Why do these measures use different inputs? Current assets should be divided by sales, but current liabilities should be divided by the COGS. Inventory and accounts payable are carried at cost on the balance sheet, whereas accounts receivable are recorded at the price at which goods are sold What is the average collection period? 23.00 days 20.44 days 26.83 days 79.02 days What is the payables deferral period? 62.46 days 53.94 days 48.26 days 162.09 days What is the cash conversion cycle? 96.39 days 36.37 days 28.47 days 33.21 days