The ____ shows the time interval over which additional non-spontaneous sources of working capital financing must be obtained to carry out the firm's activities.
A) inventory conversion period
B) cash conversion cycle
C) payables deferral period
D) receivables conversion period

Question

Quizplus · Accepted Answer

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. It gives an idea of how quickly a company can convert its investments into cash. It includes three components - the inventory conversion period, the receivables conversion period, and the payables deferral period. Therefore, it is the best choice as it is the only option that includes all three components mentioned in the question.

The ____ Shows the Time Interval Over Which Additional Non-Spontaneous