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What strategies can a firm use to optimize its cash cycle?

Question:

What strategies can a firm use to optimize its cash cycle?

Cash Cycle:

The cash cycle measures the time required for the organization to sell its goods and receive cash from the customers. It also includes the measurement of time needed for paying creditors and receiving cash from debtors.

Answer and Explanation: 1

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The organization can use the following strategies to optimize its cash cycle:

1) The time allowed for payments should be shortened. The organization...

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Operating Cycle & Cash Cycle: Definition & Calculations

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Chapter 17 / Lesson 2
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The operating cycle and cash conversion cycle are both tools to evaluate the timeline of when a business will become profitable. Explore the calculations of each, and identify their importance to a business.


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