A cash conversion cycle of -5 days is better than a cash conversion cycle of 50 days.

Question

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A negative cash conversion cycle means that a company is receiving cash from customers before it has to pay its suppliers, which is a good sign of efficient working capital management. On the other hand, a positive cash conversion cycle means a company is paying its suppliers before receiving payment from its customers, leading to cash flow problems. Therefore, a cash conversion cycle of -5 days is much better than a cycle of 50 days.

A Cash Conversion Cycle of -5 Days Is Better Than