A measure of how long cash is tied up in receivables, payables, and inventory is called?

Question

Quizplus · Accepted Answer

The cash-to-cash cycle time measures the amount of time it takes for a company to convert its investments in inventory and other resources into cash flows from the sale of the inventory. It includes all three elements of the question: receivables, payables, and inventory. Therefore, option D is the correct answer. Options A, B, and C are all individual measures that only focus on one aspect of the company's cash cycle.

A Measure of How Long Cash Is Tied Up in Receivables