Asked by Brandon Morrone on May 21, 2024
Verified
The cash conversion cycle is calculated by days' sales in accounts receivable plus ________ less days' payable outstanding.
Days' Payable Outstanding
A financial metric that calculates the average time it takes a company to pay its invoices from suppliers, reflecting its payment process efficiency.
Cash Conversion Cycle
An indicator that calculates how long a business requires to turn its inventory and asset investments into cash earnings from sales activities.
- Compute and understand the cash conversion cycle and its importance in managing working capital.
Verified Answer
SS
Learning Objectives
- Compute and understand the cash conversion cycle and its importance in managing working capital.
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