💡 Why AR Days, AP Days, and Inventory Days Matter in Business Valuation

When we do business valuation, we don’t just look at the usual numbers like revenue, profit, or investment.
Another important factor to consider is the cash conversion cycle (CCC).

In short, CCC tells us:

• How fast customers pay the company (Accounts Receivable Days)
• How fast the company has to pay suppliers (Accounts Payable Days)
• How quickly inventory turns into sales (Inventory Days)

This cycle determines how efficiently the company turns operations into cash — and ultimately, how healthy its liquidity is.

So it’s not just about making profit.
A company also needs to make sure it has enough cash on hand to stay afloat.

👉 Want to know how cash flow efficiency affects a company’s valuation?
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