CCP and Activity Measures

CCP and Activity Measures - CCP and Activity Measures...

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CCP and Activity Measures 1 Calculation of the Cash Conversion Period (CCP) relies on three activity measures. Activity measures indicate how efficiently the firm is using its assets. Days Inventory Held (DIH) Inventory Turnover
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Cash Conversion Period (CCP) 2 Days Inventory Held (DIH) measures inventory management by calculating the average length of time inventory is in stock before being sold. Inventory Cost of Sales / 365 Days Inventory Held = Note: Using average inventory is a more accurate calculation.
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Cash Conversion Period (CCP) 3 Days Sales Outstanding (DSO) measures credit / collections management by calculating the average time to collect from customers. Receivables Sales / 365 Days Sales Outstanding = Note: Using average receivables is a more accurate calculation.
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4 Days Payables Outstanding (DPO) measures payables management by calculating the average time from inventory receipt to payment. Payables
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CCP and Activity Measures - CCP and Activity Measures...

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