Salty Dog Brewery has the following data, in thousands. Assuming a 365-day year, what is the company's cash conversion cycle? Hint: Sales/Day = 123.29; COGS/Day = 82.19. Annual sales = $45,000Annual cost of goods sold = $30,000Inventory = $3,500Accounts receivable = $1,800Accounts payable = $2,800

23.11 days

Explanation:

The computation of the cash conversion cycle is shown below:

The cash cycle = Days inventory outstanding + days sale outstanding - days payable outstanding

where,

Day inventory outstanding = (Beginning inventory + ending inventory) : cost of goods sold * number of days in a year

= ($3,500 : $30,000) * 365 days

= 42.58 days

Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) : Annual sales * number of days in a year

= ($1,800 : $45,000) * 365 days

= 14.6 days

Day payable outstanding = (Beginning Accounts payable + ending Accounts payable) : cost of goods sold * number of days in a year

= ($2,800 : $30,000) * 365 days

= 34.07 days

Now put these days to the above formula

So, the days would equal to

= 42.58 days + 14.6 days - 34.07 days

= 23.11 days