A firm may have a negative cash conversion cycle if it
A) carries very little inventory and sells its products for cash.
B) carries very little inventory and sells its products on credit.
C) carries high inventory and sells its products for cash.
D) carries high inventory and sells its products on credit.

Question

Quizplus · Accepted Answer

A negative cash conversion cycle means that a company is able to collect payments faster than it needs to pay suppliers. This can occur when a company carries little inventory and sells its products for cash, allowing it to quickly convert sales into cash without having to wait for payment from customers or pay for inventory upfront.

A Firm May Have a Negative Cash Conversion Cycle If