Consider the case of Red Pencil Office Supplies:

Red Pencil Office Supplies is a mature firm that has a stable flow of business. The following data was taken from its financial statements last year:

Annual sales $10,500,000

Cost of goods sold $6,825,000

Inventory $2,700,000

Accounts receivable $1,900,000

Accounts payable $2,800,000

Red Pencils CFO is interested in determining the length of time funds are tied up in working capital. Use the information in the preceding table to complete the following table.

(Note: Use 365 days as the length of a year in all calculations, and round all values to two decimal places.)

Inventory Conversion Period =

Average collection Period =

Payables Deferral Period =

Cash conversion cycle =