Wolfgang Electricals estimates that the company takes 31 days on average to pay off its suppliers. It also knows that it has days' sales in inventory of 54 days and days sales' outstanding of 34 days. What is its cash conversion cycle

57 days

Explanation:

The computation of the cash conversion cycle is shown below:

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

= 54 days + 34 days - 31 days

= 57 days

Hence, the cash conversion cycle is 57 days

We simply added the days' sales in inventory and days sales' outstanding and deduct the days payable outstanding so that the cash conversion cycle could come