What are the Three Components of the Cash Conversion Cycle?
If you've ever wondered how businesses turn inventory into cash, you're about to crack the code. The secret lies in understanding the cash conversion cycle (CCC). The CCC consists of three main components: Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO), and Days Payable Outstanding (DPO). This cycle reveals how fast a company can buy, sell, and receive cash from its products.