The cash conversion cycle of a firm is presented below. What conclusion is BEST supported by this information?
2008 2009 2010
Days of sales outstanding 48.3 44.7 46.6
Days of sales in inventory 40.8 20.6 10.8
Days of payables outstanding 40.9 62.4 63
Cash conversion cycle 48.2 2.9 (5.6)
The firm is in worse shape in 2010 than it was in 2008
The firm's efforts to reduce the days of sales in inventory are paying off.
The firm's days of sales outstanding is relatively unchanged since 2008 and thus merits further investigation
The firm's credit terms appear lenient, resulting in few days of payable outstanding.