Cash Conversion Cycle (Entrepreneurial Finances) - Definition, Examples, Advice | Bolder Money

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Definition

Measuring the time it takes from buying supplies to getting money from sales. A shorter cycle means money comes in faster to cover costs.

What to consider

Understand both fixed and variable costs.
Use break-even analysis to set realistic sales targets.
Adjust operational strategies to lower the break-even threshold.

Real world scenarios

A café in Denver determines the number of coffees it must sell daily to cover all fixed and variable costs.
An online retailer calculates break-even volume for new product launches.
A consultant computes the break-even point before offering a new service package.

Related terms

Entrepreneurial Finances

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