Cash Conversion Cycle Flashcards
1
Q
It isa measure of how long cash is tied up in working capital. It quantifies the number of days it takes a company to convert cash outflows into cash inflows and, therefore, the number of days of funding required to pay current obligations and stay in business.
A
Cash Conversion Cycle (CCC)
2
Q
meaning of DIO
A
Days of Inventory Outstanding
3
Q
meaning of DSO
A
Days of Sales Outstanding
4
Q
is how many days it takes to sell the entire inventory. The smaller the number, the better.
A
Days of Inventory Outstanding
5
Q
the number of days a company takes to collect on sales.
A
Days of Sales Outstanding
6
Q
meaning of DPO
A
Days of Payables Outstanding
7
Q
This metric reflects the company’s payment of its own bills or accounts payable (AP).
A
Days of Payables Outstanding
