Cash conversion cycle
How many days pass between paying for materials and receiving cash from the customer. Throughout that gap the business funds itself.
Formula
Each term is the turnover of that item in days over one period. The measure can be negative, which is a normal state for retail.
How to read the number
A negative cycle means the business runs on its suppliers' money: the customer pays before the company settles up.
When the metric lies
Where it is used
The metric is calculated across every security in the catalogue and appears on the instrument card, in the multiples table and in the screener.
Also known as: ccc