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ExamsIBPS POGeneral Awareness

A low Cash Conversion Cycle (CCC) implies:

  1. The company has high levels of inventory
  2. The company is experiencing cash flow problems
  3. The company can convert invested capital into cash quickly
  4. The company has a high level of accounts receivable

Correct answer: The company can convert invested capital into cash quickly

Solution

The Cash Conversion Cycle measures the time taken to convert investments in inventory and other resources into cash from sales. A low CCC means the company recovers cash quickly and operates efficiently.

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