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Questions and Answers
What is the formula for Cash Conversion Cycle?
What is the formula for 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)
What does a higher Accounts Payable Turnover indicate for Company A compared to Company B?
What does a higher Accounts Payable Turnover indicate for Company A compared to Company B?
- 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
What is the relation between Accounts Payable Turnover and Average Collection Period?
What is the relation between Accounts Payable Turnover and Average Collection Period?
- They are not related (correct)
- Average Collection Period determines the Accounts Payable Turnover
- They are inversely related
- They are directly related
What is the formula for Accounts Payable Turnover?
What is the formula for Accounts Payable Turnover?
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If Company A has a higher Accounts Payable Turnover than Company B, does it mean that Company A has a lower percentage of credit purchases?
If Company A has a higher Accounts Payable Turnover than Company B, does it mean that Company A has a lower percentage of credit purchases?
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What does Accounts Payable Turnover measure?
What does Accounts Payable Turnover measure?
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