CASH CONVERSION CYCLE Negus Enterprises has an inventory conversion period of 68 days, an average collection period of 43 days, and a payables deferral period of 23 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations. a) What is the length of the firm's cash conversion cycle? Cash conversion cycle Inventory Average Payables conversion + collection -deferral period period period b) If Negus's annual sales are $3,421,975 and all sales are on credit, what is the firm's investment in accounts receivable? Sales per day Sales /365 Average receivables Sales per day x DSO c) How many times per year does Negus Enterprises turn over its inventory? COGS = CP Inventory/COGS per day Inventory COGS per day x ICP Inventory Turnover COGS/ Inventory Inventory