In management accounting, the cash conversion cycle (CCC) measures how long a firm will be deprived of cash if it increases its investment in resources in order to expand customer sales. It is thus a measure of the liquidity risk entailed by growth. 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.
Read more about Cash Conversion Cycle: Definition, Aims of CCC
Other articles related to "cash conversion cycle, cash":
... Our aim of studying cash conversion cycle and its calculation is to change the policies relating to credit purchase and credit sales ... We can change our standard of payment of credit purchase or getting cash from our debtors on the basis of reports of cash conversion cycle ... If it tells good cash liquidity position, we can maintain our past credit policies ...
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