The ________ of a Firm Is the Amount of Time

question 56

Multiple Choice

The ________ of a firm is the amount of time required for a company to convert cash invested in its operations to cash received as a result of its operations.

• A) cash turnover
• B) cash conversion cycle
• C) average age of inventory
• D) average collection period

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Definitions:

Equity Multiplier

A ratio of financial leverage that calculates the proportion of a company's assets funded by its shareholders' equity.

Total Assets Turnover Ratio

Measures the turnover of all the firm’s assets; it is calculated by dividing sales by total assets.

Debt Ratio

A financial ratio that measures the extent of a company’s or individual's leverage, calculated by dividing total liabilities by total assets.

Window Dressing

Techniques employed by firms to make their financial statements look better than they really are.