Question

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?

Answer 1

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