Which of the following statements is not correct concerning the elements of the cash conversion cycle time?

Multiple Choice

• Lean manufacturers may reduce the total cash conversion cycle time.

• Effectively managing working capital is important for businesses to survive and profit.

• The cash conversion cycle is based on accounts receivable, accounts payable, and inventory.

• The higher the number of days in the cash conversion cycle, the more efficiently the company is managing its cash.

• The cash conversion cycle measures the average time it takes to convert cash outflows into cash inflows from customers.