The cash conversion cycle of a firm is the difference between the number of days resources are tied up in the operating cycle and the average number of days the firm can delay making payment on the production inputs purchased on credit.

Question

Quizplus · Accepted Answer

This is a correct definition of the cash conversion cycle, which is a measure of how long it takes for a company to turn its investments in inventory and other resources into cash flow from sales, while considering its accounts payable and receivable.

The Cash Conversion Cycle of a Firm Is the Difference