In management accounting, the cash conversion cycle (CCC) measures how long a firm will be deprived of cash if it increases its investment in resources in order to expand customer sales. It is thus a measure of the liquidity risk entailed by growth. However, shortening the CCC creates its own risks: while a firm could even achieve a negative CCC by collecting from customers before paying suppliers, a policy of strict collections and lax payments is not always sustainable.
Famous quotes containing the words cash, conversion and/or cycle:
“Lora May: Did you ever stop to think, Porter, that in over three years theres one word weve never said to each other, even in fun.
Porter: To you, Im a cash register. You cant love a cash register.
Lora May: And Im part of your inventory. You cant love that either.”
—Joseph L. Mankiewicz (19091993)
“The conversion of a savage to Christianity is the conversion of Christianity to savagery.”
—George Bernard Shaw (18561950)
“Only mediocrities progress. An artist revolves in a cycle of masterpieces, the first of which is no less perfect than the last.”
—Oscar Wilde (18541900)