Finance · Working Capital Management

Which of the following interventions would be most effective in reducing the length of a firm's Working Capital Cycle?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1Accelerating the conversion of cash and marketable securities into fixed assets.
2Increasing the average collection period for accounts receivable.
3Negotiating longer payment terms with suppliers (increasing Trade Credit received).✓
4Increasing the average inventory holding period to prevent stockouts.

Correct answer

Negotiating longer payment terms with suppliers (increasing Trade Credit received).

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