Finance & Accounting / Treasury
Cash Conversion Cycle CCC (aka Net Operating Cycle)
How many days cash is locked up between paying for inventory and collecting from customers.
The fork, why two teams get different numbers
CCC = DIO + DSO − DPO, so it inherits every definitional fight of its three components, and adds one of its own: the DIO denominator (COGS is standard, but some teams use revenue, which is simply wrong and inflates DIO by the gross margin).
In the Metric Library
- The full fork, both definitions worked all the way through
- The trap that makes the number lie, on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: FASB ASC 210 · FASB ASC 330 (Inventory) · standard working-capital analysis