Master the Cash Conversion Cycle

Current Assets Turnover + Accounts Receivable Turnover - Accounts Payable Turnover

Inventory Turnover + Accounts Receivable Turnover - Accounts Payable Turnover

Days Sales in Current Assets + Average Collection Period - Days Payable Outstanding

Days Inventory + Average Collection Period - Days Payable Outstanding (correct)

Company A has a lower percentage of credit purchases

Company A is paying suppliers at a faster rate (correct)

Company A is paying suppliers at a slower rate

Company A has a longer Average Collection Period

They are not related (correct)

Average Collection Period determines the Accounts Payable Turnover

They are inversely related

They are directly related

<p>Credit Purchase / Average Accounts Payable</p> Signup and view all the answers

<p>No, not necessarily</p> Signup and view all the answers

<p>The number of times a company pays off its average account payable balance during a year</p> Signup and view all the answers