Which of the following is a measure of the time that it takes to convert current assets into cash?
A) accounts receivable turnover ratio
B) cash to cash operating cycle
C) number of days' sales in inventory
D) working capital

Question

Quizplus · Accepted Answer

Cash to cash operating cycle measures the time it takes to convert current assets into cash by including the time it takes to sell inventory and collect accounts receivable, and subtracting the time it takes to pay accounts payable. Accounts receivable turnover ratio measures how quickly a company collects on its credit sales, number of days' sales in inventory calculates how long it takes for a company to sell and replace its inventory, and working capital is the difference between current assets and current liabilities.

Which of the Following Is a Measure of the Time