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Working capital management is measured by the cash conversion cycle

by Salsabella Camelia (2019-12-07)

Working capital management is measured by the money conversion cycle (CCC), that is outlined by Keown, Martin, Pretty, & Scott, (2003); Adolphus, (2014 on Working Capital Management on Profitability) because the total of daily sales outstanding (average assortment period) and days of sales in inventory less days of liabilities outstanding. The longer now lag, the larger the investment in capital. a extended money conversion cycle would possibly increase profitableness as a result of it ends up in higher sales. Also, money management is important to each business that needs to fulfill up with its short-run monetary obligations (Akinyomi, 2016). He expressed additional that money represents the essential input necessary to start out and keep a business running. A firm must maintain ample money to stay its business running. money shortage can disrupts the firm’s operation and might even result in financial condition. Excessive money can tie down capital which can result in low come on capital used. A firm most maintained a healthy money position.

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