Northern Manufacturing Company found that during the last year, it took an average of 47 days to
Question:
Northern Manufacturing Company found that during the last year, it took an average of 47 days to pay its suppliers, while it took 63 days to collect its receivables. The company’s days’ sale in inventory was 49 days. What was Northern’s cash conversion cycle?
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,...
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DPO 47 days DSI 49 days DSO ...View the full answer
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Related Book For 
Fundamentals of corporate finance
ISBN: 978-0470876442
2nd Edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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