Question

"For minimizing the cash conversion​ cycle, a firm should"​ ________. A. increase mail​ managing, processing, and clearing time when collecting from customers B. turn over inventory as quickly as possible without stockouts C. pay off accounts payables as fast as possible to gain credibility D. grant longer credit terms to customers to maintain healthy business relations

Answer 1

B. turn over inventory as quickly as possible without stockouts.

Step-by-step explanation:

Inventory turnover is defined as the number of times a business sells off its stock on hand and so require replenishment in a year.

The higher the inventory turnover, the higher the number of sales and higher profits.

Cash conversion cycle is how long a business can survive without cash and investing in inventory to increase sales.

To minimise cash conversion cycle a business should ensure it sells of its inventory quickly without stockout.