In a perfect world, a firm would prefer to have a
A) positive operating cycle.
B) negative operating cycle.
C) positive cash conversion cycle.
D) negative cash conversion cycle.

Question

Quizplus · Accepted Answer

A negative cash conversion cycle indicates that a firm is able to collect cash from sales before it needs to pay its suppliers, which is ideal for maintaining liquidity and reducing the need for external financing.

In a Perfect World, a Firm Would Prefer to Have