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Concepts of cash conversion cycle and working capital used in personal life

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Explain how the concepts of cash conversion cycle and working capital can be used in a persons normal life?

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Solution Summary

This solution discusses cash conversion cycle and working capital. Additionally, this solution includes one reference source for further investigation of the topic.

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Working capital refers to current assets used in operations. This can refer to the daily usage of a person's money in pocket. An example of this is a person's daily spending on soap once he finishes his soap, laundry detergent once he is out of laundry detergent.

The cash conversion cycle (CCC) is the "length of time funds are tied up between paying for working capital and collecting cash from the sale of the working capital" (Brigham & Houston, 2007, p. 513). Therefore, CCC consists of inventory conversion period ...

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