This cash conversion cycle calculator combines days inventory outstanding, days sales outstanding, and days payable outstanding for one consistent analysis period.
Finance
Cash Conversion Cycle Calculator
Calculate inventory, receivables, and payables days from average balances or opening and closing balances.
Calculator
About this calculator
Formula notes
DIO = average inventory x period / cost of goods sold; DSO = average receivables x period / revenue; DPO = average payables x period / cost of goods sold; CCC = DIO + DSO - DPO.
Worked examples
- Example: over 365 days, revenue of 1,000,000, COGS of 600,000, and average balances of 100,000, 80,000, and 70,000 give a 47.45-day cash conversion cycle.
- Opening and closing inventory of 90,000 and 110,000 produce a 100,000 average; with 600,000 COGS over 365 days, DIO is about 60.83 days.
How to use it
- Choose direct average balances or opening and closing balances.
- Enter revenue, cost of goods sold, balances, and the matching period length.
- Review DIO, DSO, DPO, and the resulting cash conversion cycle.
Frequently asked questions
What does a negative cash conversion cycle mean?
It means the payable period exceeds the combined inventory and receivables periods under the entered figures.
Must all values cover the same period?
Yes. Mixing annual revenue with quarterly balances or another period makes the ratios internally inconsistent.
Limits and interpretation
- Revenue, cost of goods sold, balances, and period length must describe the same accounting period and use a consistent currency basis; otherwise the ratios are not comparable.
- Cash conversion cycle is an operating summary, not a liquidity forecast or valuation; seasonality, write-offs, payment terms, tax, financing, and off-balance-sheet items are omitted.