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Determine the length of the cash conversion cycle

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Reference no: EM131119930

The Garcia Industries balance sheet and income statement for the year ended 2005 are as follows:

248_q.jpg

Income Statement
(in Millions of Dollars)
Net sales ............... $100.0
Cost of sales ............... 60.0
Selling, general, and administrative expenses ... 20.0
Other expenses ............... 15.0
Earnings after tax ............. 5.0

a. Determine the length of the inventory conversion period.
b. Determine the length of the receivables conversion period.
c. Determine the length of the operating cycle.
d. Determine the length of the payables deferral period.
e. Determine the length of the cash conversion cycle.
f. What is the meaning of the number you calculated in parte?  

Reference no: EM131119930

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