The Difference Between a Firm's Operating Cycle and Its Cash

question 27

Multiple Choice

The difference between a firm's operating cycle and its cash cycle is:

• A)its account receivable days.
• B)its accounts payable days.
• C)its inventory days.
• D)how inventory is calculated.
• E)how sales are calculated.

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Definitions:

Market Liquidity

The extent to which a market allows assets to be bought and sold quickly without causing a significant change in their price.

Seasoned Equity Offering

The process where a company that has securities traded in a public market issues additional shares to the public.

Outstanding Shares

Outstanding shares refer to the total number of shares of a corporation that have been issued and are currently held by investors, including restricted shares owned by the company's insiders.

Commission Structure

Commission structure refers to the schedule or rate at which commissions are paid to sales employees or agents, based on their sales performance or revenue generated.