The firm's period between shelling out money and collecting funds associated with a given operation is referred to as the _____.
A) earnings cycle
B) cash conversion cycle
C) inventory turnover cycle
D) liquidity period cycle
E) trade cycle

Question

Quizplus · Accepted Answer

The cash conversion cycle measures the length of time between a firm's payment for inventory and the receipt of cash from the sale of that inventory. It includes the firm's inventory holding period plus the time it takes to collect accounts receivable and subtracts the time it takes to pay accounts payable.

The Firm's Period Between Shelling Out Money and Collecting Funds