FIN575 University of Phoenix Week 3 Cash Conversion Cycle Response

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Business Finance

FIN575

University of Phoenix

Description

Due Thursday

Respond to the following in a minimum of 175 words:

The cash conversion cycle (CCC) is a metric that illustrates the amount of time it takes a firm to convert investments within their inventory into cash. The cash conversion cycle formula calculates the amount of time, in days, it takes for a company to turn its resource inputs into cash.

The cash conversion cycle formula is: CCC = DIO + DSO – DPO

  • Discuss the benefits the company stands to gain by accurately determining the cash conversion cycle (CCC).
  • Discuss how an increase in the DPO will impact the cash conversion cycle?

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Explanation & Answer

Attached.

Running head: THE CASH CONVERSION CYCLE

The Cash Conversion Cycle
Student’s Name
Institution
Year

1

THE CASH CONVERSION CYCLE

2

The Cash Conversion Cycle
Often, the cash conversion cycle (CCC)is used to measure the efficiency of a company
when it comes to the conversion of inventory investments and other resource inputs into cash.
The cash conversion cycle is measured in days and thus, the fewer the days of this cycle, the
more efficient a company is in its operations. H...


Anonymous
Just what I was looking for! Super helpful.

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