The cash conversion cycle measures:

A Profitability

B The time between paying for inventory and collecting cash from sales

C Total debt

D Stock returns

✓ Correct Answer: Option B

CCC = Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding.

💡 Why is B) the correct answer?

The correct answer to the question "The cash conversion cycle measures:" is Option B: The time between paying for inventory and collecting cash from sales.

The other options — A) Profitability, C) Total debt, D) Stock returns — are incorrect for this CFA Exam Prep question. As explained above: CCC = Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding.

📚 About This CFA Exam Prep Practice Question

This 2-level CFA Exam Prep question from the Financial Reporting & Analysis topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CFA Exam Prep practice test or use flashcards for spaced repetition review.

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The cash conversion cycle measures:

✓ Correct Answer: Option B

📚 About This CFA Exam Prep Practice Question

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