Cash Conversion Cycle Calculator
Free cash conversion cycle calculator: enter accounts receivable, inventory, accounts payable, revenue, and cost of goods sold to get DSO, DIO, DPO, and the cash conversion cycle. These measure how long cash is tied up in operations.
How the cash conversion cycle works
The cash conversion cycle is how many days a business waits between paying for inventory and collecting cash from selling it, net of how long it takes to pay suppliers. It combines days sales outstanding, days inventory outstanding, and days payable outstanding: CCC = DSO + DIO - DPO. The shorter the cycle, the less working capital a business needs. When the cycle is long, businesses close the gap with financing, see financing the working capital gap and asset-based lending. To isolate collection speed use the DSO calculator, and for a liquidity snapshot the working capital calculator.
Frequently asked questions
What is the cash conversion cycle?
The cash conversion cycle measures how many days it takes to turn investment in inventory and receivables back into cash, net of the time taken to pay suppliers. It equals days sales outstanding plus days inventory outstanding minus days payable outstanding. A shorter cycle ties up cash for less time.
How is it calculated?
CCC = DSO + DIO - DPO. DSO is accounts receivable divided by revenue times 365, DIO is inventory divided by COGS times 365, and DPO is accounts payable divided by COGS times 365.
Is a negative cash conversion cycle good?
Yes. A negative CCC means a business collects from customers and sells inventory before it has to pay suppliers, effectively funding operations with supplier credit rather than its own cash.
Why does it matter to a lender?
The CCC shows how much working capital a business needs and how efficiently it manages receivables, inventory, and payables. A long or rising cycle signals a larger working capital need, the gap that factoring, ABL, and lines of credit fill.
Estimate for guidance, not a credit decision. Zolvo automates the servicing behind working capital lending on top of the systems lenders already run.