XYZ Company has issued the following financial data for 2007: Revenue (billions) 66.6 CGS (billions) 48.5 Average Inventory Value (billions) 1.11 Average Accts. Receivable (billions) 6.02 Accounts Payable (billions) 8 What is the cash to conversion cycle for 2007? (nearest whole number) Solution DIO (Days inventory outstanding)= Average inventory/COGS per day Average Inventory = (beginning inventory + ending inventory)/2 =8.54 DSO (days sales outstanding)= Average AR / Revenue per day Average AR = (beginning AR + ending AR)/2 =33.44 DPO (days payable outstanding) = Average AP/COGS per day Average AP = (beginning AP + ending AP)/2 =61.54 CCC=DPO+DSO+DIO=103.52.

1. XYZ Company has issued the following financial data for 2007: Revenue (billions) 66.6 CGS
(billions) 48.5 Average Inventory Value (billions) 1.11 Average Accts. Receivable (billions)
6.02 Accounts Payable (billions) 8 What is the cash to conversion cycle for 2007? (nearest whole
number)
Solution
DIO (Days inventory outstanding)= Average inventory/COGS per day
Average Inventory = (beginning inventory + ending inventory)/2
=8.54
DSO (days sales outstanding)= Average AR / Revenue per day
Average AR = (beginning AR + ending AR)/2
=33.44
DPO (days payable outstanding) = Average AP/COGS per day
Average AP = (beginning AP + ending AP)/2
=61.54
CCC=DPO+DSO+DIO=103.52