A3. (Cash conversion cycle) Dennis Lasser has collected some information about a food wholesaler in order to estimate its cash conversion cycle. The accumulated information is given. What will Dennis find the cash conversion cycle to be?

A3. (Cash conversion cycle) Dennis Lasser has collected some information about a food wholesaler in order to estimate its cash conversion cycle. The accumulated information is given. What will Dennis find the cash conversion cycle to be?

A3. Cash Conversion Cycle Lasser

Chapter problems

Individual assignment: Text Problem Set

Corporate Financial Management (3rd Edition): Emery, Douglas R., Finnerty, John D., & Stowe, John D. (2007)

A3. (Cash conversion cycle) Dennis Lasser has collected some information about a food wholesaler in order to estimate its cash conversion cycle. The accumulated information is given. What will Dennis find the cash conversion cycle to be?                                                                SOLUTION

Inventory turnover = 10x Inventory conversion period = 365/10 = 36.5 days

Receivables turnover = 20x Receivables collection period = 365/20 = 18.25 days

Payables turnover = 25x Payables deferral period = 365/25 = 14.6 day

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