Cash Conversion Cycle (CCC) Definition | Cash conversion cycle formula

LinkedInwithBackgroundYourPrivacyRightsInvestopediaandourthird-partypartnersusecookiesandprocesspersonaldatalikeuniqueidentifiersbasedonyourconsenttostoreand/oraccessinformationonadevice,displaypersonalizedadsandforcontentmeasurement,audienceinsight,andproductdevelopment.TochangeorwithdrawyourconsentchoicesforInvestopedia.com,includingyourrighttoobjectwherelegitimateinterestisused,clickbelow.Atanytime,youcanupdateyoursettingsthroughthe"EUPrivacy"linkatthebottomofanypage.Thesechoiceswillbesignaledgloballytoourpartnersandwillnotaffectbrowsingdata.ListofPartners(vendors)Weandourpartnersprocessdatato:Activelyscandevicecharacteristicsforidentification.Useprecisegeolocationdata.Storeand/oraccessinformationonadevice.Selectpersonalisedcontent.Createapersonalisedcontentprofile.Measureadperformance.Selectbasicads.Createapersonalisedadsprofile.Selectpersonalisedads.Applymarketresearchtogenerateaudienceinsights.Measurecontentperformance.Developandimproveproducts.ListofPartners(vendors)IAcceptShowPurposesCorporateFinance&AccountingGuidetoAccountingFinancialAnalysisCorporateFinanceFinancialStatementsFinancialRatiosAccountingDebtMergers&AcquisitionsCorporateInsuranceSeeAllCorporateFinance&AccountingFinancialStatementsWhatIstheCashConversionCycle(CCC)?Thecashconversioncycle(CCC)isametricthatexpressesthetime(measuredindays)ittakesforacompanytoconvertitsinvestmentsininventoryandotherresourcesintocashflowsfromsales.AlsocalledtheNetOperatingCycleorsimplyCashCycle,CCCattemptstomeasurehowlongeachnetinputdollaristiedupintheproductionandsalesprocessbeforeitgetsconvertedintocashreceived.Thismetrictakesintoaccounthowmuchtimethecompanyneedstosellitsinventory,howmuchtimeittakestocollectreceivables,andhowmuchtimeithastopayitsbills.CCC isoneofseveralquantitativemeasuresthathelpevaluatetheefficiencyofacompany'soperationsandmanagement.AtrendofdecreasingorsteadyCCCvaluesovermultipleperiodsisagoodsignwhilerisingonesshouldleadtomoreinvestigationandanalysisbasedonotherfactors.OneshouldbearinmindthatCC


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