Financial and Management Accounting

1: If the stock turnover ratio is 4 times and the collection period is 30 days the operating cycle would be
A.

30 days

B.

60 days

C.

90 days

D.

120 days

 

Answer : C

Explanation :
operating cycle = inventory conversion period + average collection period

shreya said: (4:15pm on Tuesday 12th July 2016)
no.............. its 120 days
DURGA PRASAD MOHAPATRA said: (6:58pm on Thursday 29th June 2017)
yes 90days i.e 360/4=90days
Nagaraj said: (5:06am on Wednesday 25th October 2017)
If it is 90, I think no need collection period. I'm I right???
Vikas sir said: (9:39pm on Tuesday 1st May 2018)
Operating cycle = CA days - CL days In this question = 90 days inventories 30 days collection periods

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Option: A

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