When a company deals only in cash transactions (from its customers and to its creditors),the cash conversion cycle is only the production cycle.

Question

Quizplus · Accepted Answer

The cash conversion cycle includes not only the production cycle, but also the time it takes to sell the product, collect payment from customers, and pay creditors. However, if a company only deals in cash transactions, the time it takes to collect payment from customers and pay creditors is eliminated, and therefore the cash conversion cycle is equal to the production cycle.

When a Company Deals Only in Cash Transactions (From Its