Cash Conversion Cycle Calculator
Calculate your cash conversion cycle (CCC) to see how many days cash is tied up in inventory and receivables before it returns to your bank account. Enter days inventory outstanding, days sales outstanding, and days payable outstanding to assess working-capital efficiency and highlight improvement levers.
Educational estimate only. Verify with your finance team before making decisions.
Examples
- DIO 45, DSO 38, DPO 30 ⇒ CCC 53.0 days (45 + 38 − 30).
- DIO 32, DSO 35, DPO 40 ⇒ CCC 27.0 days, signalling faster cash recovery.
- DIO 18, DSO 25, DPO 55 ⇒ CCC −12.0 days, meaning supplier credit funds operations.
- DIO 60, DSO 42, DPO 25 ⇒ CCC 77.0 days—flag for working-capital review.
FAQ
What does a shorter cash conversion cycle mean?
A lower CCC indicates the company recovers cash faster, improving liquidity and reducing the need for external financing.
Can the cash conversion cycle be negative?
Yes. A negative value means you collect from customers before paying suppliers, which is common in retail and subscription businesses.
Which inputs can I influence most easily?
Improving collections reduces DSO, better demand planning reduces DIO, and negotiating supplier terms can extend DPO—each lever changes the CCC.
Should I use calendar days or business days?
Most financial statements use calendar days. Pick one approach and stay consistent so trends remain comparable.
Additional Information
- Formula: Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding.
- Use trailing 12-month averages for DIO, DSO, and DPO to smooth seasonal spikes before comparing periods.
- Monitor CCC trends quarter over quarter to gauge whether process improvements are accelerating or slowing cash recovery.
- Benchmark against peers within your industry—product mix, payment terms, and channel strategy can materially affect CCC values.