A Weighted Cash Conversion Cycle

The cash conversion cycle (CCC) focuses on the length of time funds are tied up in the cycle, but it is not adjusted for the timing nor for the amount of funds committed throughout the total conversion run. A weighted cash conversion cycle (WCCC) is developed to combine the timing of the flows and t...

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Bibliographic Details
Published in:Financial management 1990-04, Vol.19 (1), p.90-99
Main Authors: Gentry, James A., Vaidyanathan, R., Lee, Hei Wai
Format: Article
Language:English
Subjects:
Accounts payable
Accounts receivable
Capital costs
Cash
Cash flow
Cash management
Cash payments
Cost of sales
Deferred payments
Financial management
Labor costs
Mathematical models
Operating cycles
Payments
Raw materials
Studies
Citations: Items that cite this one
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Summary:The cash conversion cycle (CCC) focuses on the length of time funds are tied up in the cycle, but it is not adjusted for the timing nor for the amount of funds committed throughout the total conversion run. A weighted cash conversion cycle (WCCC) is developed to combine the timing of the flows and the amount of cash used in each segment of the cycle. The WCCC provides helpful insight when evaluating short-run financial management performance.
ISSN:0046-3892
1755-053X
DOI:10.2307/3666040