Firms with short operating cycles will experience less of a lag between the creation and delivery of their products and the collection of cash from customers because:
A) their cash flow from operations will be much greater than their working capital from operations.
B) their cash flow from operations will not differ much from their working capital from operations.
C) their cash flow from operations will be much less than their working capital from operations.
D) there will be no relation between their cash flow from operations and working capital from operations.

Question

Quizplus · Accepted Answer

Firms with short operating cycles quickly convert inventory to cash, so their cash flow from operations closely aligns with their working capital from operations.

Firms with Short Operating Cycles Will Experience Less of a Lag