Fundamentals

Cash Conversion Cycle (CCC)

The Cash Conversion Cycle measures how long cash is tied up in working capital before being converted back to cash. A shorter cycle is better. Negative CCC (like Amazon) means the company collects from customers before paying suppliers - a competitive advantage.

Formula

CCC = DIO + DSO - DPO

Related Terms

Days Inventory Outstanding (DIO)Days Sales Outstanding (DSO)Days Payable Outstanding (DPO)

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This term is covered in the following lessons:

Cash Conversion Cycle