Which of the following statements is not correct concerning the elements of the cash conversion cycle time?
A)The higher the number of days in the cash conversion cycle,the more efficiently the company is managing its cash.
B)Effectively managing working capital is important for businesses to survive and profit.
C)The cash conversion cycle measures the average time it takes to convert cash outflows into cash inflows from customers.
D)Lean manufacturers may reduce the total cash conversion cycle time.
E)The cash conversion cycle is based on accounts receivable,accounts payable,and inventory.

Question

Quizplus · Accepted Answer

The statement "The higher the number of days in the cash conversion cycle, the more efficiently the company is managing its cash" is not correct. A shorter cash conversion cycle time means that the company is managing its cash more efficiently as it is able to convert cash outflows into cash inflows from customers more quickly.

Which of the Following Statements Is Not Correct Concerning the Elements