Register now or log in to join your professional community.
What is the cash conversion cycle?
IT is a combination of several activity ratios involving acccounts receivable,accounts payable and inventory turnover.
-It can be especially useful for comparing close competitors .
The cash conversion cycle is a metric used to gauge the effectiveness of a company's management and, consequently, the overall health of that company. The calculation measures how fast a company can convert cash on hand into inventory and accounts payable, through sales and accounts receivable, and then back into cash.
