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    Cash Conversion Cycle, Currency, Demand Deposits

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    1. Define cash conversion cycle (CCC), and explain why, holding other things constant, a firm's profitability would increase if it lowered its CCC.

    2. How does currency, demand deposits and marketable securities relate in today's society? Provide an example.

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    https://brainmass.com/business/management-accounting/cash-conversion-cycle-currency-demand-deposits-506583

    Solution Preview

    Dear Student,

    1. Define cash conversion cycle (CCC), and explain why, holding other things constant, a firm's profitability would increase if it lowered its CCC.
    Cash conversion cycle=inventory conversion cycle + receivables conversion period- payables conversion period
    Inventory conversion period= (average inventory/cost of goods sold)*365
    Receivables conversion period= (average accounts receivable/credit sales)*365
    Payables conversion period= (average accounts payable/purchases)*365

    Cash conversion cycle is the length of time money is tied up ...

    Solution Summary

    The expert defines cash conversion cycle, and explains why holding other things constant, a firms profitability would increase if its lowered its cash conversion cycle. How currency, demand deposits and marketable securities relate in today;s society.

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