If a firm has an operating cycle of 120 days and an average payment period of 20 days, its cash conversion cycle would be?

Sagot :

100 Days.

The time it takes for a business to convert its investments in inventory and other resources into cash flows from sales is expressed by the cash conversion cycle (CCC), a statistic that is expressed in days. The Cash Cycle Calculator (CCC), also known as the Net Operating Cycle or simply the Cash Cycle, aims to quantify how long each net input dollar is involved in the manufacturing and sales process before it is turned into cash received.

This indicator takes into consideration how long it takes for the business to sell its merchandise, collect receivables, and make bill payments.

The CCC is one of a number of quantitative indicators that may be used to assess how well a company's management and operations are carried out. While rising CCC readings should prompt more research and analysis based on other indicators, a trend of falling or constant CCC values over numerous periods is a solid indication. Remember that only some industries depending on inventory management and associated activities are covered by CCC.

Learn more about Cash Cycle Calculator (CCC), here

https://brainly.com/question/19052612

#SPJ4