Working Capital and Liquidity
Free CFA Level I lesson in Corporate Issuers. 15 min read, ~2,227 words.
Cash Conversion Cycle (CCC) = DIO + DSO − DPO. Lower is better; a negative CCC (Amazon, Walmart) means suppliers fund operations. DIO and DPO use COGS in the denominator, while DSO uses revenue. Liquidity ratios rank by strictness: Current Quick Cash. Quick excludes inventory; cash counts only cash plus...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- working capital and liquidity
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