All else the same, shortening the firm's cash cycle will likely ____________ the firm's profitability.

A) Increase.
B) Decrease.
C) Not affect.
D) Increase (only if earnings are already positive) .
E) Decrease (provided the inventory period exceeds the accounts payable period) .

Cash Cycle

The duration of time it takes a company to convert its investments in inventory and other resources into cash flows from sales.

Firm's Profitability

Indicates how effectively a company generates profit compared to its expenses and other relevant costs.

Inventory Period

The average time it takes for inventory to be sold and converted into cash or accounts receivable.