**Id:**`cash_conversion_cycle`

**Type:**`fundamentals`

**Subtype:**`ratios`

**Units:**`ratio`

**Decimal Points:**`2`

**Currency Convertible:**`No`

Cash conversion cycle is a way to measure how long it takes for a company to turn its inventory and other resources into cash. It is calculated by adding the number of days it takes to sell its inventory and collect its receivables, and subtracting the number of days it takes to pay its suppliers. The cycle shows how efficiently a company manages its working capital and cash flow. A shorter cycle means that a company can quickly convert its resources into cash, which can improve its liquidity and profitability. A longer cycle means that a company has more cash tied up in its operations, which can increase its costs and risks. The formula for cash conversion cycle is:
Where:
- Inventory days (R0062, invent_days) are the number of days it takes to sell the inventory on hand.
- Accounts receivable days (R0060, acct_rcv_days) are the number of days it takes to collect the money owed by customers.
- Accounts payable days (R0064, accounts_payable_turnover_days) are the number of days it takes to pay the money owed to suppliers.

`Cash conversion cycle = (Inventory days + Accounts receivable days - Accounts payable days)`