Wolfgangs Masonry management estimates that it takes the company 27 days on average to pay off its
Question:
Wolfgang’s Masonry management estimates that it takes the company 27 days on average to pay off its suppliers. It also knows that the company has days’ sales in inventory of 64 days and days’ sales outstanding of 32 days. How does Wolfgang’s cash conversion cycle compare with the industry average of 75 days?
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,...
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DPO 27 days DSI 64 days DSO 32 days Industry average for cash conversi...View the full answer
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Related Book For 
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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