The ________ of a firm is the amount of time required for a company to convert cash invested in its operations to cash received as a result of its operations.
A) cash turnover
B) cash conversion cycle
C) average age of inventory
D) average collection period

Question

Quizplus · Accepted Answer

The description in the question is a definition of the cash conversion cycle, which is the time it takes for a company to convert its investments in inventory and other resources to cash received from customers. Option A (cash turnover) refers to the ratio of net sales to average cash balance during a particular period. Options C and D (average age of inventory and average collection period) are components of the cash conversion cycle.

The ________ of a Firm Is the Amount of Time