Identify the most appropriate answer regarding Cash conversion cycle.
A. Is also known as cash-to-cash cycle.
B. Cash conversion cycle goes down if payable period goes up.
C. Cash conversion cycle goes up if average inventory goes up.
A) Choice A
B) Choice B
C) Choice C
D) Choice A and B are correct.
E) Choice A, B and C are all correct.

Question

Identify the most appropriate answer regarding Cash conversion cycle. 
A. Is also known as cash-to-cash cycle.
B. Cash conversion cycle goes down if payable period goes up.
C. Cash conversion cycle goes up if average inventory goes up.
A) Choice A
B) Choice B
C) Choice C
D) Choice A and B are correct.
E) Choice A, B and C are all correct.

Quizplus · Accepted Answer

The cash conversion cycle is also known as the cash-to-cash cycle (Choice A). It decreases if the payable period increases because the company takes longer to pay its suppliers (Choice B). It increases if the average inventory goes up because it takes longer to sell the inventory (Choice C).

Identify the Most Appropriate Answer Regarding Cash Conversion Cycle