- CFA Exams
- CFA Level I Exam
- Topic 3. Corporate Issuers
- Learning Module 4. Working Capital and Liquidity
- Subject 1. Cash Conversion Cycle
CFA Practice Question
On May 15, your firm receives 20 cases of designer pens. On June 30, your firm pays $3,250 for the pens. On July 15, the pens are sold on credit for $10,500. On September 10, your firm collects the receivable in full. If each transaction occurs at the end of the business day, how many days are in the inventory period?
A. 46 days
B. 61 days
C. 72 days
Explanation: Days in the accounts payable period: 46.
Days in the accounts receivable period: 57.
Days in the cash cycle: 72.
Days in the accounts receivable period: 57.
Days in the cash cycle: 72.
User Contributed Comments 3
| User | Comment |
|---|---|
| pdubyac | Cash cycle--from disbursement to cash receipt AP period--from inventory receipt to cash payment AR period--from sale to cash receipt Inventory period--from inventory receipt to sale |
| serboc | you can just count the number of day from 5/15-7/15 |
| kellyyang | good ideas! |