Cash Conversion Cycle: A Guide to Forex Trading”.

The Cash Conversion Cycle (CCC) is a measure of a company’s liquidity, efficiency, and profitability. It is calculated by taking the average of the days sales outstanding (DSO), inventory days, and days payable outstanding (DPO). The CCC determines how long a company’s cash is tied up in each of the three areas of operations. It is important to note that while cash flow may remain positive, a company can still be overinvested in one of the components of the CCC. Companies may use foreign exchange strategies to minimize the effects of currency movements on the cash conversion cycle.

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