Assume a merchandising company's estimated sales for January, February, and March are $107,000, S127,000, and $117,000, respectively. Its cost of goods sold is always 60% of its sales. The company always maintains ending merchandise inventory equal to 20% of next month's cost of goods sold. It pays for 20% of its merchandise purchases in the month of the purchase and the remaining 80% in the subsequent month. What are the cash disbursements for merchandise purchases that would appear in the company's cash budget for February?

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.