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Post by account_disabled on Dec 23, 2023 22:07:29 GMT -5
There is No Longer Any Liquidity, a Company is at Risk of Bankruptcy. You Can Recognize This in Good Time by Constantly Determining the Money Turnover Period and, Ideally, Avoid Bankruptcy . What Does the Cash Conversion Cycle Measure? With the Ccc You Can Measure How Long an Existing Cash or Bank Balance (Liquid Funds) Can Be Optimized. The Focus of the Investigation is the Period Between the Company's Investment Activity and the Optimization of Its Own Receivables Portfolio. This Includes Sales. From Operational Business as if the Proceeds Can Be Converted Into Liquid Assets at Short Notice . How Can the Cash Conversion Cycle Be Interpreted? When C Level Contact List Purchasing Goods and Raw Materials, a Company Usually Negotiates Longer Payment Terms With Its Suppliers. Management Also Has to Allow for a Correspondingly Long Period of Time for the Settlement of the Claims. You Can Use the Cash Conversion Cycle to Calculate How Many Days Will Pass Until Financial Resources Are Available Again. You Can Use This to Pay Your Own Invoices to Your Suppliers. The Smaller the Ccc, the Shorter This Period and the Lower the Risk That Your Company Will Become Insolvent. Which Components Are Crucial for the Cash Conversion Cycle? The Cash Conversion Cycle is Made Up of Three Components . You Will Get to Know These Below: 1. Dso (Days Sales Outstanding): Accounts Receivable Term With the Dso You Can Determine How Quickly You Convert Customer Receivables Into Liquid Assets on Average . 2. Dpo (Days Payables Outstanding): Accounts Payable Term the Creditor Term Indicates How Quickly Your Customers Pay Outstanding Invoices.
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