Efficiency Ratios Flashcards
1
Q
Days receivable
A
How long it takes for a company to collect payment from its customers.
2
Q
Days payable
A
How long it takes for a company to pay its suppliers.
3
Q
Cash conversion cycle
A
The time it takes for a company to convert its inventory into cash.
- A low cash conversion cycle indicates that the company is efficiently managing its inventory and collecting payment from its customers.
