Cash Conversion Cycle Formula: An Academic Guide to FX Trading

4 min read

The Cash Conversion Cycle (CCC) is a formula used to measure the efficiency of a business’ ability to convert cash investments into profits. It takes into account the average time it takes for customers to pay invoices, the average time the business takes to pay its suppliers and the average amount of inventory the business holds. By measuring these three components, the CCC formula can be used to evaluate the effectiveness of a business’ cash management and to identify opportunities for improvement. The CCC formula is also an important tool for Forex traders, who need to identify trends and opportunities to capitalize on the fluctuation of currencies.