The time interval between paying for raw materials and collecting on sales of finished goods is known as the:

Question

Quizplus · Accepted Answer

The time interval between paying for raw materials and collecting on sales of finished goods is known as the cash conversion cycle. It is also sometimes referred to as the net operating cycle. This cycle is the amount of time that it takes for a company to convert its investments in inventory and other resources into cash flows from sales. The cash conversion cycle calculation involves three elements: the inventory cycle, accounts payable cycle, and accounts receivable cycle. However, the inventory and accounts payable cycles are not options in the question.

The Time Interval Between Paying for Raw Materials and Collecting