Cash conversion cydeCash management is a very important function of managers. Companies need to manage their operations in a way that they can sustain growth and yet not run out of cash.Consider the case of the Red Hamster Manufacturing Corporation:Red Harnster Manufacturing Corporation has forecasted sales of $$30,000,000$ for next year and expects its cost of goods sold $($COGS$)$ to remain at $80\%$ of sales. Currently, the firm holds $$3,100,000$ in inventories, $$2,300,000$ in accounts receivable, and $$2,500,000$ in accounts payable.

On average, it takes from the time a sale is made until the time cash is collected from customers.

Red Hamster Manufacturing relies on customer credit when it buys raw materials from its supplers, On average, it takes After the firm purchases materials before it sends cash to its suppliers. The length of Red Hamster Manufacturing's cash conversion cycle $($CCC$)$ is In general, firms prefer a