In: Finance
Briefly explain the impact on a company’s C2C cycle if they experienced:
An increase in accounts payable turnover
An increase weeks payable
An increase in weeks receivable
An increase in weeks in inventory
(A) Increase in Weeks payable
Explanation:
If increasing Weeks which is payable to creditors then the cash to cash cycle will be improved.
Cash-to-cash cycle time (also known as cash-conversion cycle or order-to-pay cycle) measures the days between (1) the purchase of materials/inventory from a supplier and (2) payment collection for sale of the resulting product(s).
The option (A) is right option.
The option (A) is right option.