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?© BrainMass Inc. brainmass.com March 4, 2021, 8:21 pm ad1c9bdddf
Working Capital = Current Assets - Current Liabilities
Cash Conversion Cycle = AR Days + Inventory Days - Payable Days
Due to the new system, ...
The expert examines the working capital and cash conversion cycles.