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    Solve: Working Capital and Cash Conversion Cycle

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    A new computer system allows your firm to more accurately monitor inventory and anticipate future inventory shortfalls. As a result, the firm feels more able to pare down its inventory levels. What effect will the new system have on working capital and on the cash conversion cycle?

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    Working Capital = Current Assets - Current Liabilities
    Cash Conversion Cycle = AR Days + Inventory Days - Payable Days

    Due to the new system, ...

    Solution Summary

    The expert examines the working capital and cash conversion cycles.