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Pages:
1 page/≈275 words
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1 Source
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Coursework
Language:
English (U.S.)
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MS Word
Date:
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$ 6.32
Topic:

Short-Term and Long-Term Financial Decisions: Cash Conversion Cycle

Coursework Instructions:

Why is understanding the relationship between the cash conversion cycle (CCC) and net working capital important to the contemporary business executive? Explain ways in which executive decisions regarding the CCC and net working capital can affect a company both adversely and beneficially. Support your response with a specific example from the business world. Cite and reference needed.

Coursework Sample Content Preview:

Short-Term and Long-Term Financial Decisions
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Short-Term and Long-Term Financial Decisions
Working capital refers to the cash resources a business requires to sustain operations and pay its creditors in the short-term, usually within a time frame of 12-months or less. It is necessary for a business to have sufficient funds to meet its daily short-term financial needs. Working capital typically constitutes the revenue collected from the sale of goods and services. Therefore, it comprises trade receivables, inventories, and trade payables. On the other hand, the cash conversion cycle denotes the time held up in working capital or the amount of time it takes a company to sell its stock or services, receives revenue, and settle accounts payable. Working capital and cash conversion cycle are interrelated in that, to keep the business running, the busi...
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