When a firm's cash conversion cycle is negative, the firm should benefit by being able to use the financing provided by the suppliers of its production inputs to help support aspects of the business other than just the operating cycle.

Question

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A negative cash conversion cycle means that a company is able to collect payments from customers before it needs to pay its suppliers for production inputs. This results in an inflow of cash that can be used for other aspects of the business, such as investments or debt repayment.

When a Firm's Cash Conversion Cycle Is Negative, the Firm