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JAIIB Paper 3: Accounting & Financial Management for BankersModule B: Financial Statements AnalysisUnit 10: Cash Conversion Cycle & Working Capital Ratios
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Q1. A company has Inventory Holding Period of 70 days, Debtors Collection Period of 40 days, and Creditors Payment Period of 30 days. What is the Net Cash Conversion Cycle (CCC)?

A
80 Days
B
110 Days
C
140 Days
D
10 Days

Incorrect Answer

Formula: CCC = Inventory Days + Debtors Days - Creditors Days

Gross Operating Cycle = Inventory Days + Debtors Days = 70 + 40 = 110 Days. Net Cash Conversion Cycle (CCC) = Gross Operating Cycle - Creditors Payment Days = 110 - 30 = 80 Days.

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