May 5, 2020
Formulas:
Cash conversion cycle = days inventory outstanding + days sales outstanding + days payables outstanding
CCC = DIO + DSO – DPO
Cash conversion cycle (CCC) = Inventory conversion period (DIO) + Receivables conversion period (DSO) − Payables conversion period (DPO)
Cash conversion cycle = inventory conversion period + receivables collection period (average collection period) – payables deferral period
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