Ashwell Corp has $1,600,000 of sales, $200,000 of inventories, $150,000 of receivables, and $100,000 of payables. Its cost of goods sold is 70% of sales. Assume a 365-day year.
Ashwell's wants to reduce its cash conversion cycle.
Which of the following steps would help it accomplish that goal?
A.It increases its average inventory while holding sales constant.
B.It tightens its credit policy while holding sales constant.
C. It starts paying its bills faster, thus reducing its average accounts payable. Sales are not affected by this action.
D.It loosens its credit policy while holding sales constant.
