Calculators
Cash Conversion Cycle Calculator
Calculate days inventory outstanding, days sales outstanding, days payables outstanding and the cash conversion cycle.
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The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
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What people use it for
- Finding cash trapped in operations
- Setting targets for collections and stock levels
- Comparing suppliers' payment terms
- Lender and investor reporting
About this tool
What the Cash Conversion Cycle Calculator does
The cash conversion cycle (CCC) is the number of days between paying for inventory and collecting cash from customers. It adds the days stock is held and the days customers take to pay, then subtracts the days you take to pay suppliers. A shorter cycle frees cash.
Formula
- DIO = average inventory ÷ COGS × days
- DSO = average receivables ÷ revenue × days
- DPO = average payables ÷ COGS × days
- CCC = DIO + DSO − DPO
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Annual revenue | $2,400,000 |
| Annual cost of goods sold | $1,500,000 |
| Average inventory | $250,000 |
| Average receivables | $300,000 |
| Average payables | $180,000 |
| Days in period | 365 |
| Result | Value |
|---|---|
| Cash conversion cycle | 62.7 days |
| Days inventory outstanding | 60.8 days |
| Days sales outstanding | 45.6 days |
| Days payables outstanding | 43.8 days |
| Cash tied up per day of cycle | $4,110 |
How to read the result
Each day removed from the cycle releases roughly one day of cost of goods in cash, shown as cash tied up per day.
A negative cycle means customers pay you before you pay suppliers, a powerful position many subscription and marketplace businesses enjoy.
Related calculators
- Accounts Receivable Days Calculator: Calculate days sales outstanding, receivables turnover and the cash released by collecting faster.
- Accounts Payable Days Calculator: Calculate days payables outstanding, payables turnover and the cash effect of changing supplier payment timing.
- Accounts Receivable Aging Calculator: Analyse receivables by age bucket, the share overdue and an expected-loss bad debt allowance.
- Accounts Payable Aging Calculator: Analyse bills owed by age bucket, the share overdue and the late fee exposure on overdue balances.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
Shorter is better. Compare with businesses in the same industry, since stock-heavy businesses naturally have longer cycles.
Collect from customers faster, hold less stock and negotiate longer payment terms with suppliers.
Inventory is carried at cost, so it is compared with the cost of goods sold rather than revenue.
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