cover image

Cash conversion cycle

Length of time it takes a company to convert resource inputs to cash flows / From Wikipedia, the free encyclopedia

Dear Wikiwand AI, let's keep it short by simply answering these key questions:

Can you list the top facts and stats about Cash conversion cycle?

Summarize this article for a 10 years old


In management accounting, the Cash conversion cycle (CCC) measures how long a firm will be deprived of cash if it increases its investment in inventory in order to expand customer sales.[1] It is thus a measure of the liquidity risk entailed by growth.[2] However, shortening the CCC creates its own risks: while a firm could even achieve a negative CCC by collecting from customers before paying suppliers, a policy of strict collections and lax payments is not always sustainable.

Oops something went wrong: