Question

What is a question that should be asked about accounts payable when forecasting?

What is the cash conversion cycle?
How will our cash inflows be affected?
How much product on hand is too much?
How quickly can we replenish goods?

Answer 1

In forecasting accounts payable, one of the relevant questions is:

What is the cash conversion cycle?

Step-by-step explanation:

The variables used in computing the cash conversion cycle include accounts receivable days, inventory turnover days, and accounts payable days. Specifically, cash conversion cycle (CCC) is the period in days that it takes the firm to convert cash into inventory, then into sales, and finally back into cash. To gain a good understanding of accounts payable, one should always consider the major inclusive metric.