A firm may have a negative cash conversion cycle if it carries ________.
A) very little inventory and sells its products on credit
B) high inventory and sells its products on credit
C) very little inventory and sells its products for cash
D) high inventory and sells its products for cash

Question

Quizplus · Accepted Answer

A negative cash conversion cycle can occur when a firm carries very little inventory and sells its products for cash, as this means the firm can quickly convert its products into cash without needing to sell on credit, reducing the time between outlay of cash and its recovery.

A Firm May Have a Negative Cash Conversion Cycle If