Given the following information, what is the inventory days of supply?
Given the following information, what is the inventory days of supply?
To calculate the inventory days of supply, the cash-to-cash cycle time formula can be rearranged. The formula is: Cash-to-Cash Cycle Time = Inventory Days of Supply + Days Sales Outstanding - Days Payable Outstanding. By rearranging to solve for Inventory Days of Supply, we get: Inventory Days of Supply = Cash-to-Cash Cycle Time + Days Payable Outstanding - Days Sales Outstanding. Substituting the values given: Inventory Days of Supply = 20 days + 18 days - 16 days = 22 days.
Cash-to-cash cycle time = Inventory days of supply + days sales - days payable; Inventory days = Cash-to-cash c.t. - days sales + days payable; Inventory days = 20 - 16 + 18 = 22.
Correct answer is B
Correct answer is C