Cash Conversion Cycle
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Cash conversion cycle= Inventory conversion period + Receivables conversion period - Payables deferred period
= 120000/(600000/365) + 160000/(600000/365) -25000/(600000/365)
=155 days=Answer
1. What does the CCC value mean?
2. Is this an adequate cash conversion cycle?
3. Discuss the relationship between the cash conversion cylce and firm value.
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Solution Summary
The solution examines cash conversion cycle. What adequate cash conversion cycle is is determined.
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1. What does the CCC value mean?
Answer:
The cash conversion cycle means for the length of time between when the company makes the payments and when it receives the cash inflow.
2. Is this an adequate cash ...
Education
- MBA, Indian Institute of Finance
- Bsc, Madras University
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