Topic: “Impact of cash conversion cycle and short term investment on profitability”

Conceptual Framework

INDEPENDENT DEPENDENT
VARIABLE VARIABLE

Cash conversion
cycle

Average Days of
inventory turnover
Net profit margin

Average Days of
receivables

Average Days of
payables

Short term
investment

Net profit margin = a + B1 (Cash Conversion Cycle)1 + B2 (Avg. days of Inventory

turnover)2 + B3 (Avg. days of Receivables)3 + B4 (Avg. days of Payables)4 + B5
(Short term investment)5