The concept of the cash conversion cycle, it's application of the concept in the Lawrence Sports simulation and its reference to the required reading.© BrainMass Inc. brainmass.com October 10, 2019, 1:39 am ad1c9bdddf
Cash conversion cycle concept
Application of Concept to Simulation:
The new Lawrence Sports (LS) financial manager is responsible for balancing sales with collections or accounts receivables (cash inflows) and purchases with payments or accounts payables (cash outflows). The financial manager was hired because the company realized ...
If the cash conversion cycle for a company is too long, then businesses could find themselves short on available cash to pay account payables. The accountants in a company keep a close eye on the cash inflow and outflows. If too much money is going out and not coming in, this flow could have a negative result on a company's available credit and their score.