Explain why cash conversion cycle for Internet retail companies (for example, Amazon.com or Wayfair.com) is usually...
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Explain why cash conversion cycle for Internet retail companies (for example, Amazon.com or Wayfair.com) is usually very low, or even negative? Hint: Cash Conversion Cycle = ICP + DSO - DPO. You should focus on how the business model/characteristics of Internet retail companies affect each of the elements in the Cash Conversion Cycle calculation. Explain why cash conversion cycle for Internet retail companies (for example, Amazon.com or Wayfair.com) is usually very low, or even negative? Hint: Cash Conversion Cycle = ICP + DSO - DPO. You should focus on how the business model/characteristics of Internet retail companies affect each of the elements in the Cash Conversion Cycle calculation.
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Answer rating: 100% (QA)
Online retailers have a low Inventory Conversion Period ICP because they dont need to physically sto... View the full answer
Related Book For
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Posted Date:
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