- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 11. Financial Analysis Techniques
- Subject 3. Liquidity Ratios
CFA Practice Question
Which of the following is another term for the net trade cycle?
B. Inventory cycle
C. Sales cycle
A. Cash conversion cycle
B. Inventory cycle
C. Sales cycle
Correct Answer: A
Another term for the net trade cycle is the cash conversion cycle. The net trade cycle helps the analyst understand why cash flow has improved or deteriorated.
User Contributed Comments 1
| User | Comment |
|---|---|
| azramirza | CCC(NTC)=(Days sales O/S)+(Days of Inventory on hand)-No of days payable |