Series 79 practice questionmediumFinancial Statement Analysis
A manufacturer has 75 days of inventory, 46 days sales outstanding, and 27 days payables outstanding. What is its cash conversion cycle?
- A148 days
- B56 days
- C73 days
- D94 days✓ Correct answer
Explanation
Why D — 94 days
94 days Cash conversion cycle equals days inventory outstanding plus DSO minus DPO. The metric shows how long cash is tied up in the operating cycle before it returns to the business.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 477+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Collection, Analysis & Evaluation of Data questions
- In a DCF, final-year unlevered free cash flow is $40 million, the perpetual growth rate is 2%, and WACC is 8%. Which…
- A buy-side analyst sees days sales outstanding rise from 50 days to 62 days while reported revenue growth accelerates.…
- Why do precedent transaction multiples usually exceed comparable public company trading multiples for the same target?
- Apex Systems reports revenue of $120 million, cost of goods sold of $67 million, SG&A expense of $18 million, and…