Solved

A fiRm Has Days' Sales in Inventory of 105 Days

Question 252

Essay

A firm has days' sales in inventory of 105 days, an average collection period of 35 days, and takes
42 days, on average, to pay its accounts payable. Taken together, what do these three figures imply
about the firm's operations and its cash flows?

Correct Answer:

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It takes, on average, 105 days to sell i...

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