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Cash conversion cycle
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<p>In <a href="/facts/Management_accounting/Dg3TjFdy">management accounting</a>, the Cash conversion cycle (CCC) 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 <a href="/facts/Liquidity_risk/6eVYQWTx">liquidity risk</a> entailed by growth. However, shortening the CCC creates its own risks: while a firm could even achieve a negative CCC by collecting from customers before paying suppliers, a policy of strict collections and lax payments is not always sustainable. </p>