Question

if the credit period is increased by the suppliers of the company cash conversion cycle will

Answer 1

Hi, here is your answer,

If the credit period is increased by the suppliers of the company cash conversion cycle will be shorter.

Then it is also good to note that in order to measure the cash conversion cycle, you need another measure called the days payables outstanding.

I hope it helps

Answer 2

When a supplier to any company increase the credit period, cash conversion cycle get reduced.

Therefore, option A is the correct answer.

Credit period is the time frame allotted by the suppliers to complete the due payment for the product sell.

If they increase the period, the customers will not pay the money immediately so the cash conversion will automatically get reduced.