For business owners it is no surprise that cash flow is essential to the survival and success of a business. The cash conversion cycle formula can help you monitor and measure how effective and efficient your business is at converting its activities that require cash, ultimately, back into cash. In my experience as a business broker, I know that even if a business seller doesn't think this is important to measure, a business buyer likely will - so it's something that someone preparing for a business sale may want to consider. The following article from WallStreetPrep describes why the cash conversion cycle is important, the formula to calculate this, and how to use this information:
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