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    newbrat2's Avatar
    newbrat2 Posts: 8, Reputation: 1
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    #1

    Apr 24, 2009, 12:07 PM
    Working Capital
    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?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Apr 24, 2009, 10:37 PM

    Freeing CASH from holding excess Inventory
    Has a beneficial effect on Working Capital.
    Mathematically the cash conversion cycle
    Should be reduced due to the new volume
    Of Inventory held.
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