Your operating cycle is 231 days long, your cost of goods sold is $22 million, and...

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Your operating cycle is 231 days long, your cost of goods sold is $22 million, and...

Your operating cycle is 231 days long, your cost of goods sold is $22 million, and your average payables are $8 million. What is the length of your cash cycle?

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Answer 1

Answer #1

Days in payables=(Average payables/Cost of goods sold)*365 days

=(8/22)*365

=132.73 days

Cash cycle=Operating cycle-Days in payables

=231-132.73

=98.27 days(Approx).

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Answer 2

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