What is the length of the company cash cycle

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Reference no: EM131979447

Dandee-Lion's Tack Coral has annual sales of $900,000; cost of goods sold of $450,000; average inventory of $5,000; average accounts receivable of $40,000; and an average accounts payable balance of $20,000. Assuming that all of Dandee-Lion's sales are on credit, what is the length of the company's cash cycle?

Show your work processes.

Refer to these:

Cash cycle = Inventory conversion period + Receivables conversion period – Payables conversion period.

Inventory conversion period = Avg. Inventory / (COGS / 365)

Receivables conversion period = Avg. Accounts Receivable / (Credit Sales / 365)

Payables conversion period = Avg. Accounts Payable / (Purchases / 365).

Reference no: EM131979447

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