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How to interpret the cash conversion cycle?
A short thread 🧵🧵 with examples !!
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A short thread 🧵🧵 with examples !!
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Before understanding cash conversion cycle we should understand what are inventory days, debtor days and payable days.
Firstly let's look at its formula and then will look at its interpretation.
Firstly let's look at its formula and then will look at its interpretation.
Cash conversion cycle is calculated as Inventory days + Debtor days - payable days. Inventory days + Debtor days is known as operating cycle.
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