The Cash Conversion Cycle Is the Total Number of Days

question 248

True/False

The cash conversion cycle is the total number of days in the operating cycle less the average payment period for inputs to production.

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Definitions:

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in no net loss or gain.

Variable Costs

Costs that fluctuate in direct relation to the level of production or volume of operations in a business.

Fixed Costs

Costs that remain constant and do not change based on the volume of goods or services a business produces.

Required Sales

The amount of sales a company needs to achieve in order to cover its costs and reach a desired level of profit.