BYTETOOLS

Cash Conversion Cycle Calculator

Work out DIO, DSO, DPO and the cash conversion cycle from revenue, COGS and balance sheet figures, plus the cash a shorter cycle would release.

60.8
DIO (days inventory)
48.7
DSO (days sales)
54.1
DPO (days payable)
55.4
Cash conversion cycle
109.5
Operating cycle (days)
$1,300,000
Working capital invested
$1,366,667
Cash tied up in the cycle
$24,658
Cash freed per day cut
LegAverage balanceDivided byTurns per periodDays
Inventory (DIO)$900,000COGS $5,400,0006.0060.8
Receivables (DSO)$1,200,000Revenue $9,000,0007.5048.7
Payables (DPO)$800,000COGS $5,400,0006.75−54.1
Cash conversion cycle—DIO + DSO − DPO—55.4
$257,078
Cash released at the target cycle

A cycle in the 30-90 day range is typical of manufacturers and B2B distributors. Every day you shave off releases cash permanently.

DIO = avg inventory ÷ COGS × days  ·  DSO = avg receivables ÷ revenue × days  ·  DPO = avg payables ÷ COGS × days  ·  CCC = DIO + DSO − DPO

Worked example on a 365-day year: $1,500 average inventory against $3,000 COGS gives DIO = 182.5 days, which is the same answer as 365 ÷ inventory turns (365 ÷ 2). With $5,000 receivables on $9,000 revenue (DSO 202.8) and $2,000 payables on the same COGS (DPO 243.3), CCC = 182.5 + 202.8 − 243.3 = 141.9 days.

“Cash tied up” approximates the cycle at daily revenue ($24,658 per day here), which is the quick planning number; the working-capital line above it is the exact balance-sheet figure (inventory + receivables − payables). Some analysts compute DSO on credit sales only and DPO on purchases rather than COGS — if your finance team does, enter those figures instead. Everything is calculated in your browser and nothing is uploaded. Estimates for planning, not financial advice.

What is the Cash Conversion Cycle Calculator?

The cash conversion cycle measures how many days cash is locked up between paying a supplier and being paid by a customer.

  • DIO, DSO and DPO computed separately with turns for each leg
  • Beginning-and-ending or average-only balance sheet input
  • Configurable period length: 365, 360, 252, 90 or 30 days
  • Operating cycle, working capital invested and cash tied up in the cycle
  • Cash released per day of cycle improvement, and at a target cycle
  • Each leg shows a dash on a zero denominator rather than dividing

How to use the Cash Conversion Cycle Calculator

  1. 1

    Choose the number of days in the period and enter revenue and COGS for that same period.

  2. 2

    Pick whether you are entering beginning and ending balances or an average you already calculated.

  3. 3

    Fill in inventory, accounts receivable and accounts payable for each.

  4. 4

    Read DIO, DSO, DPO and the cash conversion cycle in the stat tiles, and the per-leg breakdown in the table.

  5. 5

    Set a target cycle to see how much cash a shorter cycle would release.

About the Cash Conversion Cycle Calculator

The cash conversion cycle measures how many days cash is locked up between paying a supplier and being paid by a customer. It adds days inventory outstanding to days sales outstanding and subtracts days payable outstanding, which is why a business can be profitable on paper and still run out of money.

Enter revenue, cost of goods sold and the inventory, receivables and payables balances — either beginning and ending, which the tool averages for you, or an average you already have. It returns each leg separately, the operating cycle, the working capital invested and how much cash a shorter cycle would free.

Everything is calculated locally in your browser. Nothing is uploaded, stored or sent to a server, so you can work from real management accounts without them leaving the machine. Where a leg has no denominator — no revenue, or no cost of goods sold — that leg shows a dash instead of dividing. These are planning estimates, not financial or accounting advice.

Frequently asked questions

What is the cash conversion cycle formula?

CCC = DIO + DSO − DPO. Days inventory outstanding is average inventory ÷ COGS × days; days sales outstanding is average receivables ÷ revenue × days; days payable outstanding is average payables ÷ COGS × days. The result is the number of days cash is tied up in the operating cycle.

Is a negative cash conversion cycle good?

It usually is. A negative cycle means you collect from customers before you have to pay suppliers, so growth funds itself. Supermarkets, marketplaces and subscription businesses that bill upfront often run negative cycles, which is why they can expand without raising working capital.

Should DSO use total revenue or credit sales?

Strictly it should use credit sales, because cash sales never sit in receivables. Many analysts use total revenue because credit sales are not disclosed. If your finance team reports credit sales, enter that figure in the revenue box and the DSO will be more accurate.

How much cash does cutting one day off the cycle release?

Roughly one day of sales. On nine million of annual revenue that is about 24,700 per day at a 365-day year. The tool shows this figure directly, and the target-cycle box multiplies it by the number of days you plan to remove.

Why is my DIO showing a dash?

Days inventory outstanding divides by cost of goods sold, so a COGS of zero has no answer. Rather than print an infinity symbol the tool shows a dash for that leg only, and the cash conversion cycle stays dashed until every leg it depends on has a value.

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