Answer :
Answer:
Cash conversion cycle of Hauser Corporation is 70.8 Days
Explanation:
Cash Conversion cycle = Days sales outstanding + Days inventory outstanding - Days payable outstanding
Cash Conversion cycle = 36.5 Days + 59.1 Days - 24.8 Days
Cash Conversion cycle = 70.8 Days.
The Hauser company takes 70.8 days to convert its inventory into cash.
Final answer:
The Days Inventory Outstanding (59.1 days) and Days Sales Outstanding (36.5 days), then subtracting Days Payables Outstanding (24.8 days), which results in a cash conversion cycle of 70.8 days. The correct option is d.
Explanation:
To calculate the Hauser Corporation's cash conversion cycle for 2016, we need to take into account the metrics provided: Days Sales Outstanding (DSO), Days Payables Outstanding (DPO), and Days Inventory Outstanding (DIO).
The cash conversion cycle is found using the formula:
Cash Conversion Cycle = DIO + DSO - DPO
In this scenario:
- Days Inventory Outstanding (DIO) = 59.1 days
- Days Sales Outstanding (DSO) = 36.5 days
- Days Payables Outstanding (DPO) = 24.8 days
Plugging in the values, we get:
Cash Conversion Cycle = 59.1 + 36.5 - 24.8 = 70.8 days
Therefore, the correct answer is:
D. 70.8 days
