One way to improve the cash conversion cycle is to ________.
A) speed up collections
B) slow down credit approvals
C) slow down inventory turnover
D) speed up payments

Question

Quizplus · Accepted Answer

Speeding up collections means collecting payments from customers more quickly, which reduces the amount of time cash is tied up in accounts receivable. This can improve the cash conversion cycle. Slowing down credit approvals or inventory turnover would have the opposite effect and slow down the cash conversion cycle. Speeding up payments could improve the cycle, but may not be feasible if the company needs to maintain positive relationships with suppliers or if it risks running out of cash to meet other obligations.

One Way to Improve the Cash Conversion Cycle Is to ________