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1) what does it mean in regards to a business/company when a) account receivables increase/decrease b) inventory days increase/decrease c) accounts payable days increase/decrease d)
1) what does it mean in regards to a business/company when
a) account receivables increase/decrease
b) inventory days increase/decrease
c) accounts payable days increase/decrease
d) cash conversion cycle increases/decreases
Note- There are four parts to answer (Part A,B,C, and D) in this question. I am trying to understand the cash conversion cycle and what it means when it increases/decreases and what each part of the cash conversion cycle represents when it increases/decreases. Please answer each part and explain what an increase or decrease in that section would indicate.
I understand that CCC= Account Receivable days+inventory days-account payable days
I am just trying to fully understand the implications of an increase and decrease in each section of the cash conversion cycle (CCC) in order to write a report about it.
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