1. 18.1 We first need the turnover ratios. Note that we use the average values for all statement of financial position items and that we base the inventory and payables turnover measures on cost of sales:

1.
We can now calculate the various periods:

1.
So the time it takes to acquire inventory and sell it is about 43 days.
Collection takes another 88 days, and the operating cycle is thus 43 + 88 = 131 days. The cash cycle is 131 days less the payables period: 131 − 61 = 70 days.

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= 8.51 times 4.13 times = 5.96 times Inventory turnover = $11375/[($1273 +1401)/2] Receivables turnover = $14750/[($3782 + 3368)/2] Payables turnover = $11375/[($1795 + 2025)/2] =