What Is a Good Cash Conversion Cycle? Why Shorter Isn’t Always Better
What is a good Cash Conversion Cycle? Most companies treat the Cash Conversion Cycle (CCC) as a race to the bottom – the shorter, the better. But in reality, a “lean” cycle can backfire. This article explores why the CCC is one of finance’s most misunderstood metrics, and how to manage it around the right setpoint – enough working capital to support the business, but no more than it needs.