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Here’s What You Need to Know About the Cash Conversion Cycle

flowchart of the cash conversion cycle

There are a lot of things that contribute to a successful business, but there’s no doubt that cash is a pretty significant one.  Whether or not a business can generate enough revenue to not only stay afloat, but make a profit, determines whether or not that business can continue to operate.

But collecting that cash is not as simple as swiping a customer’s credit card.  From the first cent a business spends in buying its stock, to the final cent the business receives in payment from a customer, the cash conversion cycle can tell a lot about just how efficient and effective a business is.

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How Could You Possibly Make 10 Times What You’re Earning?

This post has been created to demonstrate simple accounting principles for our MYOB Training Course students. It demonstrates, visually, a very simple fact that is often sensationalised.

I’ve been to many presentations, seminars and watched hundreds of webinars run by people who describe themselves as gurus yet the secrets they reveal are actually just plain old good accounting principles.

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