The way companies manage their working capital affects their profitability. Different firms focus on managing cash, inventory, or credit to maximize returns. High-growth companies tend to have stricter credit policies and invest more in inventory. Despite the cost, many firms use trade credit extensively. In the UK, most business transactions are done on credit terms. The cash conversion cycle of a company is closely linked to its profitability, with managing accounts payables, accounts receivables, and inventory playing a key role in maximizing profits.