Company cash conversion cycle-ferguson inc

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Ferguson Inc. has annual sales of $36,500,000, or $100,000/day on a 365-day basis. Ferguson also has 27,375,000 cost of the good sold. On average, the company has $12,000,000 in inventory and $8,000,000 in accounts receivable. The firm is looking for ways to shorten its cash conversion cycle, which is calculated on a 365-day basis. Its CFO has proposed new policies that would result in a 20% reduction in both average inventories and accounts receivables. She also anticipates that these policies would reduce cost of the good sold and annual sales by 10%, while the payable deferral period would remain unchanged. What effect would these policies have on the company's cash conversion cycle? Round the change in CCC to the nearest whole day.

Reference no: EM132693072

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