If It Takes Diamondback Enterprises 90 Days to Sell Inventory,46

question 154

Multiple Choice

If it takes Diamondback Enterprises 90 days to sell inventory,46 days to collect from the sale,and creditors' payment terms are 60 days,the financing period is

• A)196 days.
• B)46 days.
• C)90 days.
• D)76 days.

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Definitions:

Common Stock

Common stock represents shares of ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues.

Cash Flow

Represents the total amount of money being transferred into and out of a business, particularly affecting the company's liquidity.

Current Cash Flow

The amount of money moving in and out of a business in the present, often used to assess financial health.