Which of the following is the best definition of cash cycle?
A) The time between cash disbursement and cash collection.
B) Graphical representation of the operating cycle and the cash cycle.
C) A promise by the firm, included in the debt contract, to perform certain acts. A restrictive covenant imposes constraints on the firm to protect the interests of the debtholder.
D) A secured short-term loan to purchase inventory.
E) The time it takes to acquire and sell inventory.

Question

Quizplus · Accepted Answer

The cash cycle is the period between the outlay of cash for the purchase of inventory and the collection of cash from customers, encompassing the time it takes for a company to turn its inventory into cash.

Which of the Following Is the Best Definition of Cash