Increasing the Speed of the Cash Cycle



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In difficult economic times, CFOs and treasurers pay close attention to the speed of the cash conversion cycle—in which cash becomes inventory, payables and then receivables and, finally, once again cash. They want to identify and avoid obstacles that could impede the cash cycle. Threats to the cash cycle can be found in revenues streams, cost trends, credit availability, and cash collections. A large breakdown in any one of these areas will affect the speed of cash conversion. Here are a few prevention tips.

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