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Cash Cycle Template Presentation

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Johnny Cash template

Transcript: Important Dates His Style song song song song song song text text text text text text Biggest hits Sources: Johnny Cash insert video here Name General Music 8-2 text text text text song song song Biography book/website website website Roots/Style: text here... Pre-music career adulthood text text text text text text text text text text text 1960s 1950s Childhood 1970-2000s I listen to Johnny Cash because... His 1950s Music career

Cash Conversion Cycle

Transcript: Cash Conversion Cycle Definition Definition: The Cash Conversion Cycle (CCC) is an important business metric that indicates the average number of days it takes to purchase inventory, and then convert it into cash. Days Inventory Outstanding Days inventory outstanding (dio) Days inventory outstanding is the average time to convert inventory into finished goods and sell them. DIO= (Average Inventory / Cost of Goods Sold) x 365 days Days sales outstanding days sales outstanding (dso) The average amount of time in days that your accounts receivable are waiting to be collected. DSO= (Accounts Receivable / Net Credit Sales) x 365 days Days payable outstanding Days payable outstanding (dpo) The average length of time it takes a company to purchase from its suppliers on accounts payable and pay for them. DSP= Accounts Payable / (Cost of Goods Sold / 365) CCC Equation and interpretation CCC Equation Cash Conversion Cycle (CCC) = DIO + DSO - DPO If done every year, a business can use the CCC to compare it's current performance to past performances. It can also be compared to other companies in the same industry. Faster inventory to sales processes have a lower CCC which is desirable to a higher CCC. The CCC is also a way to asses how efficiently working capital is being managed. Resources Resources https://corporatefinanceinstitute.com/resources/knowledge/accounting/cash-conversion-cycle/ https://www.thebalancesmb.com/calculate-cash-conversion-cycle-393115

Cash Cycle Presentation

Transcript: Total SA Thank you for you attention ! :-) On change pas une équipe qui gagne ! ??? But there ! Next car, next business ! Your Future car is not there ! ??? ???

Cash Conversion Cycle

Transcript: ____________ By: Brandon Pezley, Toby Sullivan, Nick Janney, Tyler Barr ICP + DSO= Inventory Turnover Cost of Goods Sold 360 Days = Start Accounts Payable ____________ ____________ Inventory Conversion Period Payables Deferral Period = Cash Conversion Cycle End Receivables ( ) ( ) DPO= The length of time from the payment for the purchase of raw materials to manufacture a product until the collection of accounts receivable associated with the sale of the product ( ) Credit Purchases Per Day Cash Conversion Cycle= ____________ 360 Days Inventory DPO ____________ Payables Turnover Daily Credit Sales DPO= Receivables Collection Period Annual Credit Sales ICP= = 360 Days ____________ ICP= Receivables Inventory The amount of time a product remains in inventory in various stages of completion The average length of time between the purchase of raw materials and labor and the payment of cash for them; also known as days payable outstanding Cash Conversion Cycle Accounts Payable Receivables Turnover Cost of Goods Sold per day ____________ 360 Days 360 Days ____________ ____________ DSO - ____________ The time it takes to collect cash following a sale; also known as days sales outstanding Cost of Goods Sold 360 Days ____________ DSO= ____________

Cash Conversion Cycle

Transcript: Conclusions does David come to? David says that the cash conversion cycle does not account for reality. Revenue Inventory &Cost of Goods Sold Accounts Receivable Accounts Payable Definition The time between when we pay for our products and when we receive payment for selling them. Cash Conversion Cycle My Article Cash Conversion Cycle - A Good Measure What does it do? By: David K. Waltz http://treasurycafe.blogspot.com/2012/02/cash-conversion-cycle-good-measure.html Needs to be Apples - Apples Let's talk about the cash conversion cycle. Calculations "Potholes" Be careful of what conclusion we draw when comparing. Four "Potholes"

Cash Conversion Cycle

Transcript: Bobares, Ma. Theresa G. "In the game of business, the Cash Conversion Cycle is like a relay race – the faster you can pass the baton from inventory to cash, the quicker you can win the race." Cash Conversion Cycle Definition What is Cash Conversion Cycle? Definition is the amount of time in days that a company takes to convert money spent on inventory or production back into cash by selling its goods or services. For example: Example Item Grocery stores or Clothing retailers Short Machinery or automobile manufacturers Long Real estate developers or construction firm Long The Three Components of Cash Conversion Cycle 30% 15% Components 20% 35% DIO Days Inventory Outstanding is the number of days, on average, it takes a company to sell the entire inventory. DSO Days Sales Outstanding is the number of days, on average, it takes a company to collect its receivables. DPO Days Payable Outstanding is the number of days, on average, it takes a company to pay back its payables. Formula Problems: DIO Answer: Sy Co. reported a $1,000 beginning inventory and $3,000 ending inventory for the fiscal year ended 2024 with $40,000 cost of goods sold. The DIO would be: DSO Answer: Sy Co. reported $4,000 in beginning accounts receivable and $6,000 in ending accounts receivable for the fiscal year ended 2024, along with credit sales of $120,000. The DSO would be: DPO Answer: Sy Co. posted $1,000 in beginning accounts payable and $2,000 in ending accounts payable for the fiscal year ended 2024, along with $40,000 in cost of goods sold. The DPO would be: What is the Cash Conversion Cycle? 13.69 15.20 2024 2024 2024 2024 18.25 2024 19.76 = - + Conclusions: Conclusion The CCC indicates how fast a company can convert its initial capital investment into cash. By understanding the components of the CCC and implementing strategies to optimize it, businesses can improve their financial health, enhance liquidity, and drive long-term success.

Cash Conversion Cycle Presentation

Transcript: What is the Cash Conversion Cycle? By Joey Brazin and Jared Marinelli Apple's cycle is much shorter than other companies, and make a lot of revenue. Apple is growing, and gaining lots of value. Their revenue $233.7 billion, however cost of making it is $140.1 billion. The cash conversion cycle is a metric used to gauge the effectiveness of a company's management and, consequently, the overall health of that company. The calculation measures how fast a company can convert cash on hand into inventory and accounts payable, through sales and accounts receivable, and then back into cash. Apple Co. Cash Conversion Cycle Cash Conversion Cycle Presentation

Cash Conversion Cycle

Transcript: understand the options understand the risks Delivery cycle Options... Worst Case Don't know how much needed from bank Sales forecasts not secure key projects on hold Look at each area with others from your team Be open minded and listen (to both staff & customers) Agree on 2-3 possibilities per area& work out an action plan for each Develop 3 scenarios for each - best case, worst case & reality Once you have a plan, review your forecasts in light of these changes Communicate to your team, customers and... Be proactive with your bank manager! Sales Cycle Actions: Best Case Bill & Payment Cycle Bill & payment cycle Production/Inventory Cycle How does this affect your business? Cash to grow your business cash to pay your staff cash to pay your debtors cash to pay the bank interest Cash Conversion Cycle How could you reduce your production/inventory time by 20%? Could you procure some parts pre-assembled? Could you source your inventory from alternate suppliers? Could you change to 2 x shifts? What could you actually do to shorten this time? Scenario Planning Cashflow... Once again, time to think outside the box What other means could you use to reduce your delivery time to your customers? Could you use alternate transport? Could you print/produce closer to your market? Could you use technology to deliver your product or service? Scenario planning cash conversion cycle Middle of the Road Sales Cycle Delivery Cycle Time to get clever and look at both bills & payments How can you encourage your clients to pay sooner? Could you get a part payment up front & rest on delivery? Can you push your payments out to 45-60 days without any cost? Do you have someone who is measured on debtors days & cashflow? Production cycle The time it takes for $1 of operational and COG expense to return to you as cash collected from your customer! How long does it take from enquiry to closing the deal? Could you package it differently? Could you review how many steps & reduce these by 30%? How can you shorten this time? Current challenges

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