Helena Furnishings Wants to Reduce Its Cash Conversion Cycle

question 102

Multiple Choice

Helena Furnishings wants to reduce its cash conversion cycle.Which of the following actions should it take?

• A) Increases average inventory without increasing sales.
• B) Take steps to reduce the DSO.
• C) Start paying its bills sooner,which would reduce the average accounts payable but not affect sales.
• D) Sell common stock to retire long-term bonds.
• E) Sell an issue of long-term bonds and use the proceeds to buy back some of its common stock.

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Definitions:

Subsidence

The gradual sinking of land or a structure, often due to underground material movement or removal of fluids from the soil.

Uplift

A geological process where Earth's crust is raised or elevated, often as a result of tectonic activity.

Isostasy

The equilibrium state of the Earth’s crust, where the forces pushing a land mass up are balanced by the weight of the mass itself pressing down.

Equanimity

A state of mental or emotional stability, especially in difficult situations.