If a firm takes actions that reduce its DSO,then,other things held constant,this will lengthen its CCC.

Question

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A reduction in DSO (days sales outstanding) means that a firm is collecting its accounts receivables faster, which leads to a decrease in the cash conversion cycle (CCC) since it can convert its sales into cash quicker. Therefore, if DSO is reduced, holding all other factors constant, the CCC will be shortened, not lengthened.

If a Firm Takes Actions That Reduce Its DSO,then,other Things