The following projected figures are available for Ritu, Ltd., a trading concern for the year 2017-18 : Sales ₹ 27,00,000 Purchases ₹ 18,70,000 1-4-2017 31-3-2018 Inventory 3,00,000 3,40,000 Debtors 3,40,000 2,60,000 Cred

Cash operating cycle period (in days) = Stock turnover period + debtor conversion period - creditors deferred period Stock turnover period = (Average Inventory / cost of goods sold) x 365 = {(Opening inventory + closing inventory)/2}/(opening stock + purchases - closing stock) x 365 = {(3,00,000+3,40,000)/2}/(3,00,000+ 18,70,000-3,40,000) x 365 = 64 days Debtor conversion period = Average debtors/ Annual credit sales x 365 = {(opening debtors + closing debtors)/2}/ Annual credit sales x 365 = {(3,40,000+2,60,000)/2}/27,00,000 x 365 = 41 days Creditors deferral period = (Average creditors/ Annual credit purchase) x 365 = {(opening creditor + closing creditor)/2}/ Annual credit purchase x 365 = {(1,80,000+1,40,000)/2}/18,70,000 x 365 = 31 days Cash Operating cycle period (in days) = 64 days + 41 days - 31 days = 74 days