What Is a Good Cash Conversion Cycle? Industry Benchmarks and How to Judge Yours
A good cash conversion cycle is one that falls within a reasonable range of your industry average and is stable or improving over time – there is no single number…
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Working Capital vs Cash Flow: What’s the Difference?
Working capital is the difference between your current assets and current liabilities at a specific point in time, while cash flow is the movement of money into and out of…
Cash Conversion Cycle: The Complete Guide for UK SMEs
The cash conversion cycle (CCC) measures how many days it takes your business to turn the money you spend on stock and operations back into cash in your bank account.…
Net Working Capital vs Gross Working Capital: What Is the Difference?
Net working capital is your current assets minus your current liabilities – it tells you how much short-term financial cushion your business actually has after accounting for what you owe.…
Working Capital Ratio: Definition, Formula and What It Tells You
The working capital ratio (also called the current ratio) measures whether your business has enough short-term assets to cover its short-term liabilities – in plain terms, whether you can pay…
Cash Conversion Cycle (CCC): Definition, Formula and UK Benchmarks
The cash conversion cycle (CCC) measures the number of days it takes your business to convert its investment in stock and other resources into actual cash from sales. Think of…
Days Inventory Outstanding (DIO): Definition, Formula and UK Benchmarks
Days inventory outstanding (DIO) is the average number of days your business holds stock before selling it. If you run a product-based business, DIO might be the most important working…
Days Payable Outstanding (DPO): Definition, Formula and UK Benchmarks
Days payable outstanding (DPO) is the average number of days your business takes to pay its suppliers after receiving an invoice. Unlike most working capital metrics, DPO is one where…
Days Sales Outstanding (DSO): Definition, Formula and UK Benchmarks
Days sales outstanding (DSO) is the average number of days it takes your business to collect payment after making a sale on credit. If that number feels high, you are…