Asked by Connor Dimarco on Jul 04, 2024
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Which of the following are included in the cash conversion cycle?
A) inventory conversion period, the receivables collection period, and the payables deferral period
B) inventory conversion period, the receivables collection period, and the long-term assets cycle
C) acid test period, the receivables collection period, and the payables deferral period
D) the inventory conversion period and the payables deferral period
Cash Conversion Cycle
A metric that shows how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Inventory Conversion Period
Inventory Conversion Period is the average time taken for a company to convert its inventory into sales.
Payables Deferral Period
The time duration a company takes to pay off its suppliers after a purchase has been made, indicating how well the company manages its cash outflow.
- Acquire knowledge of and apply the notion of the cash conversion cycle.
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Learning Objectives
- Acquire knowledge of and apply the notion of the cash conversion cycle.
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