Positive CCCs are the most common situation since it indicates that the cash is received after the goods have been paid for. However, high levels of this ratio indicate that part of that working capital is locked up waiting for sales to occur.
In the best-case scenario, sales can occur shortly after the inventory arrives at the supplier's warehouse, but they usually spend days, weeks or even months in storage, keeping liquidity tied up.
On the other hand, those entrepreneurs who sell on marketplaces such as Amazon, will not receive the money at the moment the sale takes place, but it can take up to 2 weeks to appear in their account.
Finally, it is also important to mention that those vendors who offer financing options to their customers will see a direct impact on their CCC.