Helena Furnishings Wants to Reduce Its Cash Conversion Cycle

question 102

Multiple Choice

Helena Furnishings wants to reduce its cash conversion cycle.Which of the following actions should it take?

• A) Increases average inventory without increasing sales.
• B) Take steps to reduce the DSO.
• C) Start paying its bills sooner,which would reduce the average accounts payable but not affect sales.
• D) Sell common stock to retire long-term bonds.
• E) Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock.

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Definitions:

Firm's Flexibility

The ability of a business to adapt quickly and efficiently to changes in the market environment, customer demands, or production needs.

Responsiveness

The ability to quickly and effectively respond to customer needs, complaints, and market changes, contributing to customer satisfaction and competitive advantage.

Customer Satisfaction

Refers to the measure of how products or services supplied by a company meet or surpass a customer's expectation.

Orientation

The initial process of familiarizing a new employee with the company, its policies, and their role, or the underlying approach or attitude of an individual or organization.