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Illustration of Operating and Cash Conversion Cycles

The operating cycle shows the time period between paying for inventory and collecting cash from sales. The cash conversion cycle compares the operating cycle to payment terms, showing the time between paying suppliers and collecting cash from customers. Together these cycles illustrate how efficiently a company manages its cash flows from production to sales.

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36 views1 page

Illustration of Operating and Cash Conversion Cycles

The operating cycle shows the time period between paying for inventory and collecting cash from sales. The cash conversion cycle compares the operating cycle to payment terms, showing the time between paying suppliers and collecting cash from customers. Together these cycles illustrate how efficiently a company manages its cash flows from production to sales.

Uploaded by

Sim Pack
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Illustration of Operating and Cash Conversion Cycles

Source:
Gitman, Lawrence J. (2003). Principles of Managerial Finance, 10th edition.

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