Working capital efficiency refers to the length of time it takes for a firm to convert the raw material to a finished product.

Question

Quizplus · Accepted Answer

Working capital efficiency refers to the ability of a firm to manage its current assets and liabilities so that it can operate smoothly and generate profits. It includes how quickly a firm can convert its inventory into cash, how efficiently it manages its accounts receivable and payable, and how it utilizes its cash reserves. The time taken to convert raw material to finished product is a measure of production efficiency, which is different from working capital efficiency.

Working Capital Efficiency Refers to the Length of Time It