CashconversioncycleFromWikipedia,thefreeencyclopediaJumptonavigationJumptosearchPartofaseriesonAccountingHistoricalcostConstantpurchasingpowerManagementTaxMajortypesAuditBudgetCostForensicFinancialFundGovernmentalManagementSocialTaxKeyconceptsAccountingperiodAccrualConstantpurchasingpowerEconomicentityFairvalueGoingconcernHistoricalcostMatchingprincipleMaterialityRevenuerecognitionUnitofaccountSelectedaccountsAssetsCashCostofgoodssoldDepreciation /AmortizationEquityExpensesGoodwillLiabilitiesProfitRevenueAccountingstandardsGenerally-acceptedprinciplesGenerally-acceptedauditingstandardsConvergenceInternationalFinancialReportingStandardsInternationalStandardsonAuditingManagementAccountingPrinciplesFinancialstatementsAnnualreportBalancesheetCash-flowEquityIncomeManagementdiscussionNotestothefinancialstatementsBookkeepingBankreconciliationDebitsandcreditsDouble-entrysystemFIFOandLIFOJournalLedger /GeneralledgerTaccountsTrialbalanceAuditingFinancialInternalFirmsReportPeopleandorganizationsAccountantsAccountingorganizationsLucaPacioliDevelopmentHistoryResearchPositiveaccountingSarbanes–OxleyActMisconductCreativeEarningsmanagementErroraccountHollywoodOff-balance-sheetTwosetsofbooksvteInmanagementaccounting,theCashconversioncycle(CCC)measureshowlongafirmwillbedeprivedofcashifitincreasesitsinvestmentininventoryinordertoexpandcustomersales.[1]Itisthusameasureoftheliquidityriskentailedbygrowth.[2]However,shorteningtheCCCcreatesitsownrisks:whileafirmcouldevenachieveanegativeCCCbycollectingfromcustomersbeforepayingsuppliers,apolicyofstrictcollectionsandtaxpaymentsisnotalwayssustainable.Contents1Definition2Derivation3Aims4Seealso5References6ExternallinksDefinition[edit]CCC=#daysbetweendisbursingcashandcollectingcashinconnectionwithundertakingadiscreteunitofoperations. =Inventoryconversionperiod + Receivablesconversionperiod – Payablesconversionperiod =Avg.InventoryCOGS/365 + Avg.AccountsreceivableSales/365 – Avg.AccountspayablePurchases/365[3]Derivation[edit]Cashflowsinsufficient