Syarikat Sentosa collects it accounts receivable in 50 days after credit sales are made and pays its account receivable obligations in 28 days after credit purchases are placed. The firm's cost of goods sold averages RM 200, 000 and its closing inventory amounts to RM 30, 000

What is the firm's cash conversion cycle?

If the firm's able to extend its payment to 35 days by using new supplier, but as a result lengthen its conversion periods by 4 days, should Syarikat Sentosa switch to new supplier?

Payable

deferral

period

collection period

+

Inventory conversion period

Receivable