A negative cash conversion cycle basically means

Question

Quizplus · Accepted Answer

A negative cash conversion cycle means that the firm collects on sales more quickly than it pays its payables, which is a good thing as it frees up cash flow for the company. Option A is incorrect as a negative cash conversion cycle implies that the firm is operating efficiently. Option B is the opposite of a negative cash conversion cycle. Option D is incorrect, as the cash conversion cycle doesn't necessarily reflect the current cash balance of a company.

A Negative Cash Conversion Cycle Basically Means