What effect will the following have on the cash conversion cycle a Customers are given a larger discount for cash transactions b The inventory turnover ratio falls from 8 to 6 c New technology streamlines the production process d The firm adopts a policy of reducing outstanding accounts payable e T...

Cash conversion cycle inventory period receivables period accounts payable period ...

What effect will the following have on the cash conversion cycle ? a. Customers are given a

Question:

What effect will the following have on the ?
a. Customers are given a larger discount for cash transactions.
b. The falls from 8 to 6.
c. New technology streamlines the production process.
d. The firm adopts a policy of reducing outstanding accounts payable.
e. The firm starts producing more goods in response to customers' advance orders instead of producing for inventory.
f. A temporary glut in the commodity market induces the firm to stock up on raw materials while prices are low.
Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Cash Conversion Cycle
Cash conversion cycle measures the total time a business takes to convert its cash on hand to produce, pay its suppliers, sell to its customers and collect cash from its customers. The process starts with purchasing of raw materials from suppliers,...