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Calculate the firm cash conversion cycle

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Reference no: EM133017465

Question - Spatnik (Pty) Ltd produces Nitrogen fertilizers for the majority of commercial farmers in South Africa. The company's inventory has average age of 75 days and trade receivables are collected in 50 days. Trade and other payables are paid approximately 60 days after they rise. The average cash conversion cycle for fertilizer manufacturers is 45 days.

Required -

1. Calculate the firm's operating cycle.

2. Calculate the firm's cash conversion cycle.

3. Comment on the efficiency of inventory management for Spatnik Pty Ltd.

Reference no: EM133017465

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