Cash

Cash Conversion Cycle Formula: Understanding the Basics of FX Trading

4 min read

The cash conversion cycle is an important formula in the Forex market that measures how long it takes for a business to convert its cash investments into cash. It can be used to assess the effectiveness and efficiency of a company’s working capital and cash flow management. When analyzing a business, investors should consider the cash conversion cycle to determine how quickly a company is turning its investments into cash. By doing this, they can understand how efficient the company is when it comes to utilizing its resources and efficiently working its capital. Additionally, the cash conversion cycle can be used to gauge risk levels and to compare a company’s performance against its peers or industry averages.