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What is Cash Conversion Cycle?

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Question ajoutée par Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies
Date de publication: 2015/05/19
Zahid Farooq
par Zahid Farooq , Taxation and Accounting Director , BMS Auditing

cash conversion cycle is used to measure the efficiency and effectiveness of the management to recover the cash used in the operations. It is measured by using the three ratios

  1. days sales outstanding (DSO)
  2. days inventory outstanding (DIO)
  3. days payable outstanding (DPO)

so 

Cash Conversion Cycle (CCC)= DSO+DIO-DPO

 

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