Hello
I have a question concerning cas conversion cycle:
www.lygeros.org/Pierre/Capture.JPG
I don’t understand why we can deduce that the liquidity has improved. Since the Cash convertion cycle and operating cycle have both lengthen, how can we deduce that the liquidity has improved?
Thank you
Salut Pierre,
La réponse correct dans ton screenshot est la B, la A est ce que tu as coché (ce qui est faux) donc oui tu réduis ta liquidity et non improved
Sorry it was easier for me to answer in french
It appears from your screenshot that improved liquidity is not the correct answer; slower collection of receivables is the correct answer.
This makes sense: slower collection of receivables will lengthen the cash conversion cycle, which is the trend we observe.