question archive Assume a firm has a cash cycle of 76 days and an operating cycle of 133 days
Assume a firm has a cash cycle of 76 days and an operating cycle of 133 days
Subject:FinancePrice:2.86 Bought11
Assume a firm has a cash cycle of 76 days and an operating cycle of 133 days.
What is its payables turnover? (Use 365 days a year. Round your answer to 2 decimal places.)
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Step 1 - Calculation of payabble days
Operating Cycle = Inventory Days + Recievable Days
Cash Cycle = (Inventory Days + Recievable days) - Payable days
Since we are given operating cycle and cash cycle we can find out pabable days from the following equation
76 = 133 - Payable days
Payable days = 57
Step 2 - Calculation of payable turnover
Payable days = 365 / payable turnover
57 = 365 / payable turnover
payable turnover = 365 / 57 = 6.40
