Cash conversion basically depicts the efficiency in a number of days to utilize the available cash in order to generate more cash by quickly selling inventory (Padachi, 2006). “Cash conversion cycle define the time in which current assets transmitted in the most liquid form”. Deloof, (2003) suggests that as the number of days for converting inventory into cash increases, the more funds are to be devoted to working capital. When operating cycle increases, it increases sale as well, but this will also lead to increase in cost and at the end can affect the profitability. Many studies suggest that there is a significant inverse correlation between the profitability of a firm and cash conversion cycle (Shin and Soenen, 1998; Deloof, 2003; Raheman and Nasr, 2007; Teruel and Solano, 2007).