Working Capital

The Cash Conversion Cycle (CCC) is a efficiency metric that tracks how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. In international trade, the CCC is uniquely stretched by the "Inventory on Water" period�the literal weeks where product is in transit across oceans.

The Financial Pillars:

• DIO (Days Inventory Outstanding): Includes both the steaming time of the vessel and the days the stock sits in a bonded or regional warehouse.
• DSO (Days Sales Outstanding): The time elapsed between a sale and payment receipt. Logistics delays often delay invoicing, further stretching DSO.

The logic applied: CCC = (Transit + Inventory) + DSO - DPO. A shorter cycle reduces the reliance on bank financing and Trade Finance instruments (like Letters of Credit), directly improving the company's Return on Invested Capital (ROIC).