Length of the company cash conversion cycle

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Problem: Pizza di Joey operates several food trucks that provide hot food and beverages in the Washington DC area. The company has annual sales of $625,400. Cost of goods sold average 32 percent of sales and the profit margin is 4.5 percent. The average accounts receivable balance is $34,700. Assume 365 days per year.

Required:

Question 1: On average, how long does it take the company to collect payment for its services?

Question 2: What is the change in the Payables deferral period if the payables turnover has gone from an average of 10.50 times to 11.45 times per year?

Question 3: What is the length of the company's cash conversion cycle after the change in the Payables deferral period if the inventory turnover is 22.20 times?

Reference no: EM132417221

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