Cash conversion cycle calculator
The cash conversion cycle estimates how many days cash is tied up between paying suppliers and collecting cash from customers.
Method first: DIO equals inventory divided by cost of goods sold times period days. DSO equals receivables divided by revenue times period days. DPO equals payables divided by cost of goods sold times period days. CCC equals DIO plus DSO minus DPO.
FinanceGPTToolsCash conversion cycle calculator
The cash conversion cycle estimates how many days cash is tied up between paying suppliers and collecting cash from customers.
Calculated from the assumptions shown. Review the methodology and limitations before using the result.
How the analysis works.
DIO equals inventory divided by cost of goods sold times period days. DSO equals receivables divided by revenue times period days. DPO equals payables divided by cost of goods sold times period days. CCC equals DIO plus DSO minus DPO.
What this does not replace.
Average balances are preferable to single period-end balances. Seasonality, supplier terms, customer mix and accounting classification can materially affect interpretation.
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Open →Questions about this tool.
Can the cash conversion cycle be negative?
Yes. Some business models collect cash from customers before they pay suppliers, which can produce a negative cash conversion cycle.
