How do the following circumstances affect the cash conversion cycle (a) Favorable credit terms allow the firm to pay its accounts payable slower, (b) Inventory turnover increases, and (c) Accounts receivable turnover decreases ...

a Favorable credit terms from suppliers allow the firm to use the suppliers funds to finance ...

How do the following circumstances affect the cash conversion cycle : (a) Favorable credit terms allow the

Question:

How do the following circumstances affect the :
(a) Favorable credit terms allow the firm to pay its slower,
(b) Inventory turnover increases, and
(c) turnover decreases?

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,... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...