Question

The ____ shows the time interval over which additional non-spontaneous sources of working capital financing must be obtained to carry out the firm’s activities. Group of answer choices cash conversion cycle receivables conversion period inventory conversion period payables deferral period

Answer 1

Cash conversion cycle

Explanation:

The cash conversion cycle (CCC) is a measurement that shows the times. It is a procedure in a company to convert its investment or sales into inventory. It is also called a net processing inventory or a cash cycle. The measurement takes into account how much time the company needed to sell the inventory of the company and decided how much time taken to pay the bills without penalties. It has been differentiating on the bases of the organization business priorities

The formula of CCC is;

CCC = DIO +DSO - DPO

Where

DIO stands for days of inventory outstanding

DSO = Days sales outstanding

DPO = Days payable outstanding