The Cash Conversion Cycle

The cash conversion cycle is the operating cycle minus the number of days of:

Correct. This takes into account the number of days from ordering raw materials or inventory and actually spending the cash to pay for it. The cash converstion cycle is measured from cash out to cash in so this is subtracted from operating cycle, which begins when inventory is ordered.

Incorrect. This is included in both the operating cycle and the net operating cycle since no cash goes in or out while products are included in the inventory.

Incorrect. This is included in both the operating cycle and the net operating cycle since no cash goes in or out while customers' accounts are in receivables.

payables.

inventory.

receivables.