The cash conversion cycle (CCC) is an efficiency metric that measures the time it takes a company to convert its investments in inventory and other resources into cash. The CCC is calculated by adding the number of days sales outstanding (DSO) and the number of days inventory outstanding (DIO) and then subtracting the number of days payables outstanding (DPO).
In international trade, there are several methods of payment that can be used to facilitate the exchange of goods and services between buyers and sellers. Some of the most common methods include:
INCOTERMS (International Commercial Terms) are a set of internationally recognized trade terms developed by the International Chamber of Commerce (ICC) that are used in international trade contracts to clearly define the responsibilities and rights of buyers and sellers in relation to the delivery of goods. They specify the obligations of the buyer and seller, including who is responsible for the cost of transportation, insurance, customs clearance, and other expenses associated with the delivery of the goods. The most commonly used INCOTERMS are EXW, FOB, CIF, CPT, DAP, and DDP. The use of these terms helps to ensure a common understanding between the parties involved in the trade transaction and reduces the risk of misunderstandings or disputes. It is important to note that the choice of incoterm impacts the responsibilities and costs of both the buyer and the seller, and it should be carefully considered and agreed upon by both parties before signing the contract.