Reference no: EM132519741

Question 1: What are three factors that, when added together, equal days' inventory (inventory conversion period) for a typical manufacturing company.

1. The average number of days that raw materials remain in inventory

2. The average number of days that are necessary to convert these raw materials into finished goods (work in progress inventory)

3. ??

Question 2: What are three benefits companies gain by delaying payment until near the end of the credit term or the credit discount period.

1. It enables a company to use cash to reduce debt.

2. It enables a company to purchase other assets.

3. ??

Question 3: Describe three ways companies can shorten the cash conversion cycle.

By reducing the inventory conversion period
By extending the payables deferral period
??