The goal of the cash conversion period is to have as few days as possible in the process so as to be able to finance other activities with working capital.

Question

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The cash conversion period measures the amount of time it takes for a company to convert its investments in inventory into cash receipts from customers. The shorter the cash conversion period, the faster the company can generate cash from its sales and the more quickly it can finance its operations and growth with working capital. Therefore, the goal is to have as few days as possible in the process.

The Goal of the Cash Conversion Period Is to Have