One way to improve the cash conversion cycle is to
A) speed up collections.
B) slow down credit approvals.
C) reduce inventory turnover.
D) borrow funds.

Question

Quizplus · Accepted Answer

Speeding up collections means that cash will come in quicker, reducing the time it takes to receive payment for goods or services. This will, in turn, decrease the cash conversion cycle. The other options will not necessarily improve the cash conversion cycle. Slowing down credit approvals may lead to fewer sales and a longer cash cycle, reducing inventory turnover may lead to stockouts and reduced sales, and borrowing funds may increase debt and ultimately increase the cash cycle.

One Way to Improve the Cash Conversion Cycle Is to