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Metal Products Co. has an inventory period of 53 days, an accounts payable period of 68 days, and an accounts receivable turnover rate of 18. What is the length of the cash cycle?
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36 votes
36 votes
Metal Products Co. has an inventory period of 53 days, an accounts payable period of 68 days, and an accounts receivable turnover rate of 18. What is the length of the cash cycle?

User Ccamara
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1 Answer

21 votes
21 votes

Answer:

71 days

Step-by-step explanation:

Length of cash cycle = days of inventory on hand + days of sales outstanding - days of payables

days of sales outstanding = number of days in the period / receivable turnover

360 / 18 = 20

User JFoulkes
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