Which of the following describes the cash conversion cycle?

A) From the purchase of inventory to the collection of cash from the sale of that inventory.
B) From the payment for inventory to the sale of that inventory.
C) From the payment for inventory to the collection of cash from the sale of that inventory.
D) From the purchase of inventory to the sale of that inventory.
E) None of the above describes the cash conversion cycle.

Question

Jason Barnes · Accepted Answer

Final Answer : C, Explanation :  The cash conversion cycle is the time it takes for a company to convert its investments in inventory and other resources into cash. It starts with the payment for inventory and ends with the collection of cash from the sale of that inventory. Therefore, choice C accurately describes the cash conversion cycle.

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