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Cash Conversion Cycle
Negus Enterprises has an inventory conversion period of 73 days, an average collection period of 49 days, and a payables deferral period of 20 days. Assume that cost of goods sold is 80% of sales. Assume 365 days in year for your calculations.
1. What is the length of the firm's cash conversion cycle?
2. If Negus's annual sales are $3,953,550 and all sales are on credit, what is the firm's investment in accounts receivable? Round your answer to the nearest dollar.
3. How many times per year does Negus Enterprises turn over its inventory? Round your answer to two decimal places.
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