1. The larger cash conversion cycle means company will receive more cash. True False 2. If...

1. The larger cash conversion cycle means company will receive more cash.

True

False

2. If the cash balance falls below target cash balance, the firm may need short-term financing.

True

False

Solutions

Expert Solution

A) The statement is False

The shorter the cash conversion cycle the faster a company collects cash. Cash conversion cycle does not determine the quantum of cash but the speed with which it is converted into current assets and converted back to cash

B) The statement is True

When the cash balance falls below the target cash balance a company may have to resort to short term financing to bring the cash balance upto the level of target balance

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

which of the following statements regarding cash conversion cycle are TRUE? A. Cash conversion cycle depicts...

which of the following statements regarding cash conversion cycle are TRUE? A. Cash conversion cycle depicts the amount of days it takes for the firm to receive cash from sales B. Cash conversion cycle is calculated as follows: day sales outstanding + days payable outstanding - days inventory outstanding C. Cash conversion cycle is a measure of liquidity risk D. Cash conversion cycle measure the time it takes for the firm to exhaust its cash in its operations

1. True or False: Confidence intervals can only be calculated for means. True False SAVE 2....

1. True or False: Confidence intervals can only be calculated for means. True False SAVE 2. Suppose a sample of 200 barrow-wights (wraith-like creatures that feed on the life force of the living) yields a sample mean of 6.2 living beings consumed per day. Assuming a standard error of 1.7, what would the upper bound of a 95% confidence interval be? SAVE 3. Using the same ridiculous survey data from the previous question, what would the lower bound of a...

All true or false 1. Larger, more complex organizations usually require a longer time to prepare...

All true or false 1. Larger, more complex organizations usually require a longer time to prepare their budgets than smaller organizations because of the considerable effort to coordinate the different units within the business. 2.The budget process rarely coincides with the accounting period. 3.The manufacturing budgets include the sales budget and the budgeted income statement. 4.Management by exception means that managers focus on the most significant differences between actual costs and standard costs.

1. Is it better to have a longer or shorter cash conversion cycle? Explain. 2. What...

1. Is it better to have a longer or shorter cash conversion cycle? Explain. 2. What is the goal of inventory management? 3. List one advantage and one disadvantage of using short-term debt to finance permanent current assets. 4. True or False. The effective rate on a discount loan is always higher than the rate on an otherwise similar simple interest loan. 5. Explain what the Economic Ordering Quantity (EOQ) model does.

1. What is a company's cash conversion cycle and why is it important?

1. What is a company's cash conversion cycle and why is it important? 2. What is the likely impact of a shorter credit period on accounts receivable? 3. What is the likely impact of a loose credit policy on sales?

True or False The citric acid cycle consumes more energy than it produces.

Utilizing the information in question 1 for Charlie Company, what was the full cash conversion cycle for the company in 2018?

Charlie CompanyThe Balance Sheet and Income Statement of Charlie Company as of and for the twelve months ended December 31, 2018 shows the following information (in thousands):Opening (Prior Period) and Ending balancesAccounts Receivable Opening $4,155, Ending. $5,155Accounts Payable Opening $5,200, Ending $5,750Inventory Opening $2,150, Ending 4,150Sales on Credit (12months) $42,450Cost of Goods Sold (COGS) (12 months) 31,500Utilizing the information in question 1 for Charlie Company, what was the full cash conversion cycle for the company in 2018? Hint: You will...

Sales are a component of cash flow statement 1.True 2.False

Question 1 Accuracy means presenting data that is based on theory. True False Question 2 A...

Question 1 Accuracy means presenting data that is based on theory. True False Question 2 A celebrity spokesperson is never a good idea. True False Question 3 A creative brief should help identify what’s in it for me prior to message development. True False Question 4 A call to action is a necessary component of a health communication message. True False Question 5 Fidelity monitoring is a part of the design phase of evaluation. True False

true or false. If false explain. 1. Hyperinflation causes lose of ability to move cash. 2....

true or false. If false explain. 1. Hyperinflation causes lose of ability to move cash. 2. The measure of effectiveness and efficiency of resources is searched by finance. 3. The main objective of finance is to determine future decisions that must be taken.

Subjects