Micron Technology has the following data, in thousands. Assuming a 365-day year, what is the...

Question:

Micron Technology has the following data, in thousands. Assuming a 365-day year, what is the company's cash conversion cycle?

Annual sales = $45,000

Annual cost of goods sold = $30,000

Inventory = $3,500

Accounts receivable = $1,800

Accounts payable = $2,500

Cash conversion Cycle:

The cash conversion cycle (CCC) is a metric that expresses the time (measured in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

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Annual sales = $45,000

Annual cost of goods sold = $30,000

Inventory = $3,500

Accounts receivable = $1,800

Accounts payable = $2,500

Days in...

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Operating Cycle & Cash Cycle: Definition & Calculations

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Chapter 17 / Lesson 2
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The operating cycle and cash conversion cycle are both tools to evaluate the timeline of when a business will become profitable. Explore the calculations of each, and identify their importance to a business.


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