Determine the firm cash conversion cycle

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Reference no: EM131082927

You have been hired as a financial consultant to help improve the performance of Blue Star Inc., which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of the analysis, you want to determine the firm’s cash conversion cycle. Use the following information and a 365-day year to answer the questions below. A

verage inventory = $75,000

Annual sales = $600,000

Annual cost of goods sold = $360,000

Average accounts receivable = $160,000

Average accounts payable = $25,000

1-Determine the inventory conversion period for Blue Star

2-Determine the average collection period for the company

3-How long is Blue Star's cash conversion cycle in terms of number of days?

Reference no: EM131082927

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