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The Cash Conversion Cycle (CCC) Combines Three Factors: the Inventory

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The cash conversion cycle (CCC) combines three factors: The inventory conversion period, the average collection period, and the payables deferral period, and its purpose is to show how long a firm must finance its working capital.Other things held constant, the shorter the CCC, the more effective the firm's working capital management.


Definitions:

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus strengthens a behavior’s occurrence.

Omission Training

A method in behavioral psychology where a desirable outcome is removed following unwanted behavior, as a form of negative punishment.

Extinction

In behavioral psychology, the gradual decrease and eventual disappearance of a conditioned response when it is no longer reinforced.

Negative Reinforcement

A learning process where the removal of an unpleasant stimulus strengthens a behavior.

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