If the cash conversion cycle is shorter,then the firm's investment in inventories and receivables will be smaller.

Question

Quizplus · Accepted Answer

A shorter cash conversion cycle means that the firm is able to convert its inventories and receivables into cash more quickly. This also means that the firm would need to invest less in inventories and receivables since they are able to generate cash faster. Therefore, if the cash conversion cycle is shorter, the firm's investment in inventories and receivables will be smaller.

If the Cash Conversion Cycle Is Shorter,then the Firm's Investment