A firm has captured the following information for a product family:
The cash-to-cash cycle time is how many days?
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Question 151
Correct Answer: C
The cash-to-cash cycle time is calculated by adding the days sales outstanding (receivables outstanding) and the days inventory outstanding (supply of inventory) and then subtracting the days payables outstanding. Thus, the calculation is 53 (supply of inventory) + 34 (receivables outstanding) - 25 (payables outstanding) = 62 days.
Discussion
Hao2Option: C
Cash to cash= 34+53-25 = 62 The last 2 items are irrelevant
SamSanOption: B
Inventory 53 Payables frns -25 Receivables +34
NowazOption: A
CTC Cycle Time = Dales Sales (receivables) Outstanding + Inventory Days of Supply - Days Payables Outstanding