Customer Service Chat
Get quote & make Payment
Cash Conversion Cycle, Finance, Other Engineering
The need for working capital to run the day-to-day business activities cannot be overemphasized. We will hardly find a business firm which does not require any amount of working capital, indeed firms differ in their requirements of the working capital.
We know that a firm should aim at maximizing the wealth of its shareholders. In its endeavour to do so, a firm should earn sufficient return from its operations. Earnings a steady amount of profit requires successful sales activity. The firm has to invest enough funds in current assets for generating sales. Current assets are needed because sales do not convert into cash instantaneously. There is always an operating cycle involved in the conversion of sales into cash.
There is a difference between current and fixed assets in terms of their liquidity. A firm requires many years to recover the initial investment in fixed assets such as plant and machinery or land and buildings. On the contrary, investment in current assets such as inventories and debtors (accounts receivable) is realized during the firm’s operating cycle that is usually less than a year what is an operating cycle?
Operating cycle is the time duration required to convert sales, after the conversion of resources inventories, into cash. The operating cycle of a manufacturing company involves three phases:
1. Acquisition of resources such as raw material, labour power and fuel etc.
2. Manufacture of the product which includes conversion of raw material into work-in-progress into finished goods.
3. Sale of the product either for cash or on credit. Credit sales create account receivable for collection.
Posted Date: 2/1/2012 12:45:28 PM | Location : United States
Ask an Expert
Cash Conversion Cycle, Finance, Assignment Help, Ask Question on Cash Conversion Cycle, Finance, Get Answer, Expert's Help, Cash Conversion Cycle, Finance Discussions
Write discussion on Cash Conversion Cycle, Finance
Your posts are moderated
Write your message here..
Parallel realization iir filter, 4+9/4z +z/4 divided by 1+1/4z-z/8
4+9/4z +z/4 divided by 1+1/4z-z/8
Layout and operation of typical thrust reversing system, Layout and operati...
Layout and operation of typical thrust reversing system: Clamshell door system The clamshell door system is a pneumatically operated system, as shown in detail in fig Norm
In-plane shear tests for composite materials , The ideal test should provid...
The ideal test should provide a region of pure, uniform shear stress within the test sample. The most simple test is the tension test on the (+/-45°)ns sample, where n is greater
Math algebra calcilus, I am having difficulty with algebra pertaining toeng...
I am having difficulty with algebra pertaining toengineering
Spot welding, In spot welding, the parts to be joined are normally over lap...
In spot welding, the parts to be joined are normally over lapped. The work piece are clamped between two water cooled copper electrodes. On the passage of a high transient current,
Photo diode, what is photo diode
what is photo diode
Capital management solutions, Objective of corporate financing Corporat...
Objective of corporate financing Corporate finance control is a division of financial that refers to the control of money of an organization. The attention of corporate financi
Basic engine design considerations, BASIC ENGINE DESIGN CONSIDERATIONS ...
BASIC ENGINE DESIGN CONSIDERATIONS Effect of engine size: The two parameters involved are the diameter, d and stroke, L of the engine. The effect of doubling each of this
Commercial buildings - fire protection engineering, Commercial buildings - ...
Commercial buildings - fire protection engineering: The term 'commercial buildings' refers to any buildings that are not residential buildings and that do not fall under the m
Working of Voltage Divider Bias, Explain the Working of Voltage Divider Bia...
Explain the Working of Voltage Divider Bias?
Accounting Assignment Help
Economics Assignment Help
Finance Assignment Help
Statistics Assignment Help
Physics Assignment Help
Chemistry Assignment Help
Math Assignment Help
Biology Assignment Help
English Assignment Help
Management Assignment Help
Engineering Assignment Help
Programming Assignment Help
Computer Science Assignment Help
IT Courses and Help
Why Us ?
~24x7 hrs Support
~Quality of Work
~Time on Delivery
~Privacy of Work
Human Resource Management
Literature Review Writing Help
Follow Us |
T & C
Copyright by ExpertsMind IT Educational Pvt. Ltd.