Working Capital Cycle
Content
Definition
The Working Capital Cycle is the period it takes for a company to convert its working capital into revenue, reflecting the efficiency of its cash flow management in sustaining daily operations.
Usage and Context
The working capital cycle is the time it takes for a company to turn its working capital into revenue, reflecting cash flow efficiency.
Frequently asked questions
- What is the working capital cycle? The working capital cycle is the time it takes for a company to turn its working capital into revenue, reflecting cash flow management efficiency.
- What is the working capital process? The working capital process involves managing short-term assets and liabilities to ensure a company can meet its short-term obligations.
- What is the conversion period in working capital? The conversion period in working capital is the time it takes to turn current assets, like inventory, into cash through sales.
Benefits
The working capital cycle indicates how quickly a company converts resources into revenue, affecting cash flow.
Conclusion
The working capital cycle shows how quickly a company converts resources into revenue, affecting cash flow.
