Answer: inventory on hand.

## Explanation The cash conversion cycle (CCC) is calculated as: **CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) - Days Payables Outstanding (DPO)** Where: - **DIO** = Days Inventory Outstanding = 365 / Inventory Turnover - **DSO** = Days Sales Outstanding = 365 / Receivables Turnover - **DPO** = Days Payables Outstanding = 365 / Payables Turnover Given that the receivables turnover ratio equals the payables turnover ratio: - Receivables Turnover = Payables Turnover - Therefore, DSO = DPO (since both use the same denominator of 365) Substituting into the CCC formula: **CCC = DIO + DSO - DPO** **CCC = DIO + DSO - DSO** (since DSO = DPO) **CCC = DIO** Thus, the cash conversion cycle equals the number of days of inventory on hand. **Key Points:** - When receivables turnover equals payables turnover, DSO equals DPO - The DSO and DPO terms cancel out in the CCC formula - The remaining component is DIO (Days Inventory Outstanding) - Therefore, CCC = DIO = number of days of inventory on hand

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