Cash Cycle Equation: CCC Formula, Examples & Benchmarks
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Key terms
- BenchmarkA standard index or portfolio used to measure investment performance. Common benchmarks include the S&P 500 for large-cap stocks and the Bloomberg Aggregate Bond Index for bonds.
- Cash FlowThe net amount of cash moving in and out of your accounts. Positive cash flow means you're earning more than you're spending, while negative cash flow indicates you're spending more than you earn.
- Billing CycleThe period between credit card statements, typically 28-31 days. Purchases made during this cycle appear on the next statement and are due 21-25 days after the statement closing date.
- Cash AdvanceBorrowing cash using a credit card at an ATM or bank. Typically charges a higher APR (25%+), immediate interest (no grace period), and a cash advance fee of 3-5%.
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