A negative cash conversion cycle indicates that the
A)operating cycle exceeds the average payment period.
B)average payment period exceeds the operating cycle.
C)firm is shortening its average payment period and lengthening its average collection period.
D)lengthening its average collection period and lengthening its inventory period.
E)none of above are correct

Question

Quizplus · Accepted Answer

A negative cash conversion cycle means the firm is able to pay its suppliers after it has already collected cash from its sales, indicating that the average payment period exceeds the operating cycle.

A Negative Cash Conversion Cycle Indicates That the