Use the table for the question(s)below.
Luther Enterprises Ltd had sales of $850 million and a cost of goods sold of $500 million in 2016.
A simplified balance sheet for the firm appears below:
-Which of the following would increase a firm's cash conversion cycle?
A)increase inventory days
B)decrease accounts receivable days
C)increase cash days
D)increase accounts payable days

Question

Use the table for the question(s)below.
Luther Enterprises Ltd had sales of $850 million and a cost of goods sold of $500 million in 2016.
A simplified balance sheet for the firm appears below:  
-Which of the following would increase a firm's cash conversion cycle?
A)increase inventory days 
B)decrease accounts receivable days 
C)increase cash days 
D)increase accounts payable days

Quizplus · Accepted Answer

Increasing inventory days means that the firm is holding onto its inventory for a longer period before selling it, which would increase the cash conversion cycle.

Use the Table for the Question(s)below