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**CFA Practice Question**

An analyst has collected the following data about a firm:

Inventory turnover = 8 times

Payables turnover = 12 times

Receivables turnover = 10 times

Inventory turnover = 8 times

Payables turnover = 12 times

What is the average receivables collection period, the average inventory processing period, and the average payables payment period respectively? (Assume 360 days in a year)

A. 36 days; 45 days; 30 days

B. 45 days; 36 days; 30 days

C. 33 days; 30 days; 20 days

**Explanation:**Receivables collection period = 360/10 = 36 days

Inventory processing period = 360/8 = 45 days

Payables payment period = 360/12 = 30 days

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**User Contributed Comments**
4

User |
Comment |
---|---|

geet |
Somebody explain how they got this? |

Shelton |
by formulae, i guess. |

dimanyc |
Just get the first one, and you can see the only aceptable answer right away! |

GBolt93 |
since when are these formulas simplified to 360 instead of 365? |