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The management of a firm's short term assets and liabilities is vital to the survival and ultimate growth of firms without which it long term prospects and healthy bottom lines can't be guaranteed (Jose et al., 1996). The CCC length in days can be simply described in an equation as follows:

CCC length = Stock turnover days + receivables turnover days - payables turnover days

So we can easily understand that managing the cash both on the receivables side and the payable side is very important for the efficient utilization and ensured performance of the firms.

Adapted from Jordan (2003)

Cash conversion cycle (CCC) can be negative or positive. A positive CCC shows the number of days a firm must arrange/borrow or tie up its working capital/current assets before it receives payment from its customer(s). Whereas a negative CCC can be seen as highly favorable as it means that the firm has already received cash from sales/accounts receivables before has to discharge its current obligations towards its creditors (Hutchison et al., 2007; Uyar, 2009). It can be argued that the firm must try to make or keep the CCC days as minimum or preferably in negative as it can ultimately relieve the firm owners/managers from many worries of cash bottlenecks and liquidity problems. Managing a minimum CCC days or keeping it in negative invariably demands an efficient working capital management on the part of the firm owners. It has been argued that the firm may have to adopt all or any one of the following strategies to maintain an efficient level of CCC days (Bodie and Merton, 2000; Uyar, 2009):

Minimizing the firm's inventory turnover days:The firm must adopt efficient inventory management methods/processes of ordering, handling and utilization in the production and ensure that the inventory turnover days are kept as minimum as possible. The firm must also ensure an effective approach like that of Quick Response Supply (QRS) or the Just In Time (JIT) with respect to its inventory management to ensure a timely receiving and replenishment of stocks and supplies.

Quick collection of the firm receivables/debts:The firm must adopt an efficient and quick method of collection of its accounts so that its funds are not tied up unproductively for overdue time periods.

Slow payment of current obligations, utility bills etc.It is better and highly advisable that the firm must maintain an intact record of its payment of current obligations in such a way that it is able to avail as much days from its suppliers and creditors as possible before it has to actually discharge its obligations. The firm's ability to generate cash receipts well in advance and in excess of disbursements is vital to its success and growth (Padachi, 2006).

The management of working capital means the management of current assets and current liabilities and financing of the current assets. Liquidity management pertains to how the company manages its current assets and its liabilities. It is very helpful and plays a significant role on the successful management of the firm. The efficient working capital management is the most crucial factor for maintaining liquidity, survival, solvency and profitability of business (Mukhopadhyay, 2004). Efficiency of working capital management is based on the principle of speeding up collections as much as possible and slowing down disbursements as mu