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Homework answers / question archive / Mark's Manufacturing's average age of accounts receivable is 45 days, the average age of accounts payable is 40 days, and the average age of inventory is 69 days
Mark's Manufacturing's average age of accounts receivable is 45 days, the average age of accounts payable is 40 days, and the average age of inventory is 69 days. Assuming a 365-day year, what is the length of its cash conversion cycle?
Computation of the length of cash conversion cycle:-
Cash conversion cycle = Inventory conversion period + Receivables collection period - Payable deferral period
= 69 + 45 - 40
= 74 days
