Cash Conversion Cycle

Topic

The cash conversion cycle (CCC) is a metric in management accounting that measures the time span (in days) it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It evaluates the efficiency of a firm's operations and working capital management by tracking the lifecycle of cash as it is deployed into inventory, accounts receivable, and accounts payable. A shorter cycle indicates a more efficient and liquid business, while a longer cycle suggests that capital is tied up in operations.