Asked by Kristofer Miller on May 23, 2024
Verified
Which of the following statements is not correct concerning the elements of the cash conversion cycle time?
A) The higher the number of days in the cash conversion cycle,the more efficiently the company is managing its cash.
B) Effectively managing working capital is important for businesses to survive and profit.
C) The cash conversion cycle measures the average time it takes to convert cash outflows into cash inflows from customers.
D) Lean manufacturers may reduce the total cash conversion cycle time.
E) The cash conversion cycle is based on accounts receivable,accounts payable,and inventory.
Cash Conversion Cycle
The length of time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Working Capital
The difference between a company's current assets and current liabilities, measuring the short-term financial health and operational efficiency.
Lean Manufacturers
Practices aimed at eliminating waste and improving efficiency in the production process.
- Understand the significance of the cash conversion cycle and how it measures efficiency in managing cash flows.
Verified Answer
Learning Objectives
- Understand the significance of the cash conversion cycle and how it measures efficiency in managing cash flows.
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