CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

What is a company's payables payment period if COGS are $200,000 and the average balance of accounts payable (AP) is $10,000?
A. 18.25 days
B. 10.75 days
C. 11.33 days
Explanation: Payables turnover ratio = $200,000/$10,000 = 20

Payables payment period = 365/20 = 18.25 days

User Contributed Comments 1

User Comment
CJPerugini This is assuming that all supplier purchases were attributed to COGS and all of COGS was attributed to supplier purchases.
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