Glossary
Glossary
Glossary
Cash Conversion Cycle
Cash Conversion Cycle
Definition
Measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It is calculated by adding DSO and DOH, then subtracting DPO. A shorter cycle indicates a more efficient company.
Measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It is calculated by adding DSO and DOH, then subtracting DPO. A shorter cycle indicates a more efficient company.
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