The time interval between paying for raw materials and collecting on sales of finished goods is known as the?

Question

a: Inventory cycle
b: Matching cycle
c: Cash conversion cycle
d: Accounts receivable cycle

Answer 1

The time interval between paying for raw materials and collecting on sales of finished goods is known as the
c: Cash conversion cycle - A metric that expresses the length of time, in days, a company takes in order to convert resource inputs into actual cash flows. It attempts to measure the amount of time each net input dollar is tied up in the production and sales process before it is converted into cash through sale to customers. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties. Also known as "cash cycle".