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25 Need-To-Know Key Performance Indicators by Bernard Marr

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Chapter 12

Cash conversion cycle (CCC)

  • Why: To better understand your financial performance, especially the way cash flow is managed
  • What: Measure the time it takes from spending money on producing goods or services to money coming back into the business
  • When: When you want to assess how well a company manages its cash flow
  • The question this indicator helps you to answer: how well are we doing at maintaining a healthy cash position?

Why does this KPI matter?

A main reason why companies get into difficulties is not necessarily a lack of sales but the company running out of money in the bank (cash) to pay for the day-to-day costs of the business. An old business saying is that ‘cash is king’. With this recognition, a number of KPIs have been ...

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