Question
Summarize the following: Positive cash flow can be generated by implementing a cash conversion cycle (CCC). According to the book, Scaling Up, a cash conversion
Summarize the following:
Positive cash flow can be generated by implementing a cash conversion cycle (CCC). According to the book,Scaling Up,a cash conversion cycle is "a key performance indicator (KPI) that measures how long it takes for a dollar spent on anything (rent, utilities, marketing, payroll, etc.) to make it through your business and back into your pocket." The goal is to get money in the bank before you need to spend it, or in other words, to generate a negative CCC (i.e., -6 days)
You can shape your cash conversion cycle by changing the way your business functions in multiple areas, including your sales, delivery, production, billing, and payment cycles. For instance, you can improve your CCC by collecting payments in full before production. This way, you'll only spend on inventory when necessary.
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