Financial Reporting and Analysis Q185
185The financial information for Pear Company is provided below:
| Sales | $2.8 million |
| Cost of goods sold | $2.3 million |
| Purchases | $2.1 million |
| Average receivables | $0.6 million |
| Average inventory | $0.5 million |
| Average payables | $0.2 million |
The company’s cash conversion cycle (in days) is closest to:
- Option : B
- Explanation : CCC = DSO + DOH – Days Payables = 365 / (2.8/0.6) + 365 / (2.3/0.5) – 365 / (2.1/0.2) = 122
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