Question

look at the information your peers are posting and compare the various cash cycles. What explains...

look at the information your peers are posting and compare the various cash cycles. What explains the differences or similarities for companies in the same industry? What explains the differences or similarities for companies in different types of industries? Can a company have a negative cash cycle? Is the cash cycle a more valuable measure for some companies than for others?

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Answer #1

The Cash conversion cycle measures how long a firm will be deprived of cash if it increases its investment in inventory in order to expand customer sales. It is thus a measure of the liquidity risk entailed by growth.

  Negative cash flow may occur. When the company doesn't pay its suppliers for the goods that it buys until after it receives payment for selling those then the cash cycle will be negative.

Cash cycle will be different function in different industries. We shoulf take care what type of industry is.

ThankYou...

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