The cash conversion cycle (CCC)combines three factors: The inventory conversion period,the receivables collection period,and the payables deferral period,and its purpose is to show how long a firm must finance its working capital.Other things held constant,the shorter the CCC,the more effective the firm's working capital management.

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This statement is true. The cash conversion cycle combines the inventory conversion period, receivables collection period, and payables deferral period to show how long a firm must finance its working capital. A shorter CCC indicates more effective working capital management.

The Cash Conversion Cycle (CCC)combines Three Factors: the Inventory Conversion