Cash Conversion Cycle Calculator
How many days your money spends locked up between paying a supplier and being paid by a customer — and what that gap costs to finance.
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How it works
The cycle has three parts. Inventory sits for a while before it sells, customers take time to pay after that, and suppliers give you time before you have to pay them. The first two consume cash; the third supplies it.
A negative cycle means customers pay you before you pay suppliers, so growth funds itself — the model that made large retailers and marketplaces so cash-generative. A long positive cycle means every additional sale has to be financed before it returns anything.
CCC = DIO + DSO − DPO
- DIO — days inventory outstanding — how long stock sits before selling
- DSO — days sales outstanding — how long customers take to pay
- DPO — days payable outstanding — how long you take to pay suppliers
Worked example
48,000,000 revenue, 29,000,000 COGS, 6,400,000 receivables, 4,800,000 inventory, 3,900,000 payables
Inputs
Results
60 days of working capital tied up. Cutting DSO by ten days would release about 1,315,000 in cash — permanently.
Frequently asked questions
What is a good cash conversion cycle?
Lower is better, and negative is excellent. It is heavily industry-dependent: subscription software often runs negative, manufacturing 60–120 days. Compare against your own trend and your direct competitors rather than a cross-industry figure.
How do I improve it fastest?
DSO is usually the quickest win — invoice on the day of delivery, chase before the due date, and make payment easy. DIO takes operational change and DPO takes supplier negotiation, both slower.
Why is DIO calculated on COGS rather than revenue?
Because inventory is carried at cost, not at selling price. Using revenue would mix the two bases and understate the days significantly.
Is my data sent anywhere?
No. The calculation runs entirely in your browser. Nothing you type is transmitted to us or stored.
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