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Cash Conversion Cycle: Free Working Capital Analysis

Managing your cash conversion cycle (CCC) is vital for optimizing your working capital and maintaining the financial health of your business.

Jared Shulman
September 19, 2024

Managing your cash conversion cycle (CCC) helps you understand how long cash is tied up between paying for inputs and collecting from sales. Review inventory, receivables and supplier payment terms together. Compare your own results over time and with a relevant industry peer group rather than assuming a universal CCC target.

The CCC is a key barometer of how efficiently you manage your business. A shorter cycle indicates effective inventory management, prompt collection of receivables, and strategic handling of payables—all signs of a well-run company. Benchmarking your CCC against industry peers provides valuable insights into your operational efficiency and areas for improvement. We invite you to download our free working capital analysis to access a benchmarking tool that compares your CCC with that of your peers, helping you identify opportunities to optimize your working capital management.

Further reading

KPMG analyzes cash conversion cycles by industry and company size. See KPMG’s analysis.

Related guidance: Business Cash Flow: Daylit’s Working Capital Products; Supply Chain Management and Business Credit Risk.

References

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