hard · Private Equity & LBOs

If a portfolio company has a high 'Cash Conversion Cycle' (CCC), which of the following is true?

1. It has a higher EBITDA margin because it collects cash faster from customers.
2. It generates more free cash flow than a company with a low CCC, all else being equal.
3. It is a more attractive LBO candidate because it has more 'Debt-like' items on its balance sheet.
4. It requires more liquidity to fund its day-to-day operations as revenue grows.

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