If a firm has a cash cycle of 32 days and an operating cycle of 52 days, what is its payables turnover?
A) 7.02
B) 11.41
C) 18.25
D) 20.00

Question

Quizplus · Accepted Answer

The payables turnover period is calculated by subtracting the cash cycle from the operating cycle. So, 52 days (operating cycle) - 32 days (cash cycle) = 20 days. The payables turnover is then calculated as 365 days / 20 days = 18.25 times a year.

If a Firm Has a Cash Cycle of 32 Days