Reduce the length of a firm''s cash conversion cycle


Question:

Which of the following actions is likely to reduce the length of a firm's cash conversion cycle?

1. Adopting a new inventory system that reduces the inventory conversion period.

2. Adopting a new inventory system that increases the inventory conversion period.

3. Increasing the average days sales outstanding on its accounts receivable.

4. Reducing the amount of time the firm takes to pay its suppliers.

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Accounting Basics: Reduce the length of a firm''s cash conversion cycle
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