Homework Help

What are examples of ways to shorten the cash conversion cycle?

Mizdee's profile pic

Posted via web

dislike 1 like

What are examples of ways to shorten the cash conversion cycle?

1 Answer | Add Yours

sciencesolve's profile pic

Posted (Answer #1)

dislike 0 like

Since a short cash conversion cycle permits the business to produce cash that can be used to get extra aquisitions, the shortening process can be realized if the payments to suppliers are delayed and the payments from customers are accelerated.

If the company has an important position on market, then it can influence the terms of aquisitions, hence, it can impose new favourable terms and it can delay the payments, creating an advantageous, negative cash conversion cycle.

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes