What is a Cash Cycle?
Sometimes referred to as a cash conversion cycle, the cash cycle has to do with the amount of time that passes between the purchase of raw materials for the creation of goods and services and the receipt of payment for those products. The concept of the cash cycle can also be applied to the transaction process related to securing stocks and similar securities. A key factor in the idea behind calculating the cash cycle is to understand the period of time when working capital is not available for use in other purchases.
