Among the many things I look at when we look at short term assets is cash as well as it’s cash conversion cycle.
Cash is the oxygen of the company. some companies are able to create cash due to a variety of reasons. Among them that stands out most is the firm’s business model as well as its management.
We will look at the Cash Conversion Cycle.When a business announces its billing policy or its way it purchase its raw materials, watch it. A company has financial advantages the sooner it recieves payment for products and the later it pays bills. Amazon is an example that receives cash upfront and doesn’t need to pay its suppliers for another 30 days. Therefore, its operations is actually finance by its suppliers. [Read more…]