cash conversion cycle
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Related to cash conversion cycle: Operating cycle, Days Sales Outstanding
Cash conversion cycle
The length of time between a firm's purchase of inventory and the receipt of cash from accounts receivable.
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Cash Conversion Cycle
The time between an expenditure of money to make a product and the collection of accounts receivable from the sale of that product. Obviously, a shorter cash conversion cycle is preferable. A longer cash conversion cycle may indicate a current or potential problem with cash flow.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
cash conversion cycle
The time required for a business to turn purchases into cash receipts from customers. A short cycle allows a business to quickly acquire cash that can be used for additional purchases or debt repayment.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.