Strategic Treasury Operations & Capital Allocation
Treasury teams ensure corporate solvency, optimize working capital, and mitigate Foreign Exchange (FX) risk across international subsidiaries.
Working Capital Optimization Metrics
The Cash Conversion Cycle (CCC) measures the time in days required to convert operational investments into cash flows:
CCC = Days Sales Outstanding (DSO) + Days Inventory Outstanding (DIO) - Days Payable Outstanding (DPO)
| Working Capital Metric | Formula | Target Optimization Direction |
|---|---|---|
| Days Sales Outstanding (DSO) | (Accounts Receivable / Total Credit Sales) × 365 |
Lower (Faster customer collection) |
| Days Inventory Outstanding (DIO) | (Average Inventory / COGS) × 365 |
Lower (Lean inventory management) |
| Days Payable Outstanding (DPO) | (Accounts Payable / Cost of Goods Sold) × 365 |
Higher (Extended supplier payment terms) |