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Below is an essay on "Pressy" from Anti Essays, your source for research papers, essays, and term paper examples.

Payable days: The number of days that it takes for a company to pay off a debt to another business
  * Goodfoods payable days stay relatively the same (around 70 days) for the first three years, but then shoots up to 100 in the last year.
  * This increase is the result of an increase of Goodfoods inventory
  * By purchasing more inventories, this ties up more of Goodfoods cash flows, causing them to take more days to pay their accounts payable account.

Cash Conversion Cycle - A measurement that is expressed as a length of time, in days.
  * It conveys the time it takes for a company to convert into cash flows.
  * This cycle essentially measures the amount of time that it takes for each dollar invested into the sale process takes to be converted into cash
  * This number can be found using the following formula:
CCC= (Receivable days + Inventory days) – Payable days

EX: 1987
CCC= (21.12+140.08) – 100.22
        = 60.98

  * This means that in 1987 it takes an average of 60.98 days for Goodfood to turn their inputs into cash flows
  * This cycle is very important to Goodfoods’ as it displays how quickly they can move their products, and generate cash though sales
  * If Goodfood is managing their cash flows in an efficient manor, than the lower this number will be
  * The shorter the cycle is, the less time Goodfoods, investment is locked up in the business procedure,
  * Furthermore the smaller the cycle, the more it improves the companies’ bottom line.

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  • Submitted by: IDontCare2
  • on January 31, 2014
  • Category: Business and Economics
  • Length: 254 words
  • Views: 122
  • Popularity Rank: 533485
  • 1 rating(s)

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