CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Forest Glen Furniture Company has the following ratios: days accounts payable outstanding, 55; days inventory held, 50; days receivable outstanding, 65. Which one of the following is the correct number of days that cash inflows and outflows are mismatched (i.e., the cash cycle)?
A. 70 days
B. 50 days
C. 60 days
Explanation: The correct computation is 65 + 50 - 55 equals 60 days. This means that Forest Glen must pay its suppliers 60 days before it collects cash from its customers.

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