The cash conversion cycle represents the number of days the cash is "tied up" in the operating activities of the business.

Question

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The cash conversion cycle (CCC) measures the number of days it takes for a company to convert its investments in inventory and accounts receivable into cash collected from customers. It represents the time period between the payment of cash for raw materials and the collection of cash from customers for products sold or services rendered. Therefore, it indicates how long cash is tied up in the company's operating cycle.

The Cash Conversion Cycle Represents the Number of Days the Cash