What Is the Equation for the Cash Conversion Cycle

question 49

Multiple Choice

What is the equation for the cash conversion cycle?

• A) Operating Period + Accounts Payable
• B) Operating Period × Accounts Payable
• C) Operating Period - Accounts Payable
• D) Operating Period / Accounts Payable

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Definitions:

Contribution Margin

The selling price per unit, minus the variable cost per unit, which helps in determining the profitability of products.

Break-even Chart

A graphical representation that shows the point at which total costs and total revenue are equal, indicating no net loss or gain.

Total Revenue

The total amount of money generated by a business from its sales of goods or services before any expenses are subtracted.

Total Cost

The complete amount of money spent on the production of goods or services, including all variable and fixed costs.