Which one of the following will increase the cash cycle?
A) Improving the cash discounts given to customers who pay their account early.
B) Having a larger percentage of customers paying with cash instead of credit.
C) Buying less raw materials to have on hand.
D) Paying your suppliers earlier to receive the discount they offer.
E) Ordering raw materials inventory only when you need it.

Question

Quizplus · Accepted Answer

Paying suppliers earlier reduces accounts payable, which shortens the time you hold onto cash, thus increasing the cash cycle.

Which One of the Following Will Increase the Cash Cycle