The Cash Conversion Cycle (CCC) is an important metric for managing the cash flow of a business. It is a measure of the time it takes for a company to

To mitigate the risk of cash shortage for maintaining operation effectively, you can take the following steps:

Reduce DSO (Days Sales Outstanding): This can be done by improving the company's credit policies and procedures, including credit checks on new customers, invoicing promptly, and following up on overdue payments.

Increase DIO (Days Inventory Outstanding): This can be done by reducing inventory levels, improving inventory management and forecasting, and negotiating better terms with suppliers.

Extend DPO (Days Payable Outstanding): This can be done by negotiating longer payment terms with suppliers, taking advantage of early payment discounts, and optimizing payment processes.

Monitor and improve the overall cash flow: This can be done by regularly reviewing cash flow forecasts and taking appropriate actions to manage cash inflows and outflows, such as reducing expenses, increasing sales, and managing working capital.

By effectively managing the CCC, you can improve the cash flow of your business, reduce the risk of cash shortages, and ensure that you have sufficient funds to purchase operational and salary-related items.