The cash conversion cycle is used to analyze the financial aspects of a business. The higher the number, the longer the company's money is tied up in operations of the business, therefore the cash not be used for other financial activities The cash conversion cycle is the actual number of days between paying for raw materials and receiving the actual cash from the sale of the goods. The following formulas are used to calculate the …showed first 75 words of 530 total…

…showed last 75 words of 530 total…This additional cash can be used to increase the cash flow. Investing and financing are ways to increase cash flow however the cash can also be used towards operational expenses. The cash conversion cycle needs to be managed properly. The analysis of this cycle will aide in the increase of profitability for the organization. By performing this test, one can see that Xtreme Toys has an increase in additional cash and a cash savings of $167,945.66.