CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

An analyst has gathered the following data about a company: average receivables collection period of 37 days, average payables payment period of 30 days, average inventory processing period of 46 days. What is their cash conversion cycle?
Correct Answer: 53 days

Cash conversion cycle = average receivables collection period + average inventory processing period - payables payment period = 37 + 46 - 30 = 53 days

User Contributed Comments 7

User Comment
smiley25 Operating cycle = 37 + 46 = 83 days
ashok1959 can some one explain , why answer is 53 and not 83?
achu CCC = operating cycle MINUS the average accts payable balance. Thus, 83-30 =53.
safash difference between operating cycle & cash conversion cycle?
johntan1979 Similar
FozzeyBear a lot of help you provided there johntan1979. I've come to expect this from you though
ashish100 johntan definitely on some meds.. dude's everywhere
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