Question

What impact would the following actions have on the operating and cash conversion cycles? Would the cycles increase, decrease, or remain unchanged?
a. Less raw material than usual is purchased.
b. The company encounters unseasonable demand, and inventory declines rapidly.
c. Tighter terms of payment are demanded by suppliers.
d. The cash discounts offered to customers are increased.
e. All else remaining the same, due to labor turnover and poor efficiency, the cost of goods sold increases.



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  • CreatedJune 12, 2012
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