Apply For OD/CC/Working Capital

Operating cycle (OD), also known as the cash conversion cycle (CC), is a crucial metric for managing working capital. It represents the time it takes for a company to convert its investments in raw materials and labor into cash from sales. The shorter the OD/CC, the more efficient a company is at managing its working capital. A shorter cycle means that a company can quickly reinvest cash and generate more profits. To calculate OD/CC, add the number of days it takes to sell inventory to the number of days it takes to collect accounts receivable, and then subtract the number of days it takes to pay accounts payable. A shorter OD/CC typically indicates better liquidity and financial health.