5
Concepts
6
Formulas
1
Decisions
3
Quiz Questions
5 concepts covered in this module.
Current assets - Current liabilities. Measures short-term financial health and operational efficiency.
DOH + DSO - DPO. Days to convert raw materials to cash. Lower CCC = more efficient working capital management.
Primary: cash, receivables, inventory, credit lines. Secondary: liquidating assets, renegotiating debt, filing bankruptcy.
Delay cash inflows: uncollected receivables, obsolete inventory, tight credit markets.
Accelerate cash outflows: early payments to suppliers, reduced credit terms from suppliers, unexpected expenses.
6 essential formulas for this module.
Where: DOH = Days of Inventory on Hand, DSO = Days Sales Outstanding, DPO = Days Payable Outstanding
Where: Days to sell inventory
Where: Days to collect receivables
Where: Days to pay suppliers
Where: Higher = more liquid, but too high may indicate inefficiency
Where: Excludes inventory
1 decision frameworks to guide your analysis.
Visual overview of how concepts connect in this module.
This module has 12 flashcards and 3 quiz questions to test your knowledge.
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