QUESTION THREE

b. A companys sales revenue for the year just ended was GH28 million. The company earned a gross margin of 40% on sales. All sales and purchases were on credit.

The following balances have been extracted from the year-end accounts:

Inventory GH4 million

Accounts receivable GH6 million

Accounts payable GH3 million

Required:

Calculate, to the nearest whole number, the companys cash operating cycle based on the year ended figures.