If the owner plans to sell a business, he or she should be removing all surplus cash and tightening the cash-to-cash cycle to the shortest time possible.
The cash conversion cycle (CCC) is a metric that measures how long it takes a business to turn its investments in inventory and other resources into cash flows from sales, expressed in days.
This metric considers how long it takes to sell inventory, how long it takes to collect receivables, and how long it can pay its obligations without being penalized.
Based on the way businesses operate, CCC will vary per industry sector.
The idea is crucial for evaluating finance needs because it is used to calculate how much money is required to fund continuing operations.
Hence, If the owner plans to sell a business, he or she should be removing all surplus cash and tightening the cash-to-cash cycle to the shortest time possible.
Learn more about cash flows:
brainly.com/question/735261
#SPJ1
