What impact would aggressive action aimed at minimizing a firm’s cash conversion cycle (CCC) have on the following financial ratios: inventory turnover, average collection period, and average payment period? What are the key constraints on aggressive pursuit of these strategies with regard to inventory, accounts receivable, and accounts payable?
Answer to relevant QuestionsWhat is the primary goal of the financial manager with regard to inventory management? How does this goal compare to the inventory goals of production and marketing? Why are providing liquidity and preserving principal the primary concerns in choosing short-term in-vestments? What guidelines should be included in a short- term investment policy? Why do firms employ cash concentration techniques? What are some of the popular transfer mechanisms used by firms to move funds from depository banks to their concentration banks? Consider a U. S. firm that has for many years exported to European countries. How does the creation of the euro simplify or complicate the management of transactions exposure for this firm? Who are the major players in foreign currency markets, and what are their motivations for trading?
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