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Cash conversion cycle calculator

Trace the time between paying suppliers and collecting from customers. See which part of working capital is holding cash and how the operating cycle changes.

2–5 min · No sign-upHow it works
01 / INPUTS

Set your assumptions

Start with the example, then use your own numbers. Dollar amounts are in USD.

Your assumptions

$. Enter a value in $.

$. Enter a value in $.

$. Enter a value in $.

$. Enter a value in $.

$. Sales on credit for the period, not cash sales. Total revenue is only a proxy if credit sales are unavailable.

$. Purchases on credit for the period. Cost of goods sold is only an approximation.

days. Use the same period for sales, purchases and cost of goods sold; for example 90, 360 or 365 days.

Calculator values stay in this page. No account or email required.

02 / YOUR RESULT

Cash conversion cycle

60 days

Days inventory outstanding
60 days
Days sales outstanding
50 days
Days payables outstanding
50 days
Operating cycle before supplier credit
110 days
  • Use average balances and matching reporting periods. Receivables use credit sales; payables use credit purchases. Total sales and cost of goods sold are only proxies when the corresponding credit figures are unavailable.
  • A negative cycle is valid: customers pay before suppliers are paid. Interpret the result in the context of the business and industry.

THE METHOD

How this calculator works

DIO = average inventory ÷ COGS × days. DSO = average receivables ÷ credit sales × days. DPO = average payables ÷ credit purchases × days. CCC = DIO + DSO − DPO.

Match the period before comparing the result

Use average operating balances and sales, purchases and costs from the same period. Set the period length to match. Beginning and ending balances can provide a simple average, but more frequent observations better capture a seasonal business.

Credit purchases are the denominator for payable days. Cost of goods sold is sometimes used as a proxy when purchases are unavailable; record that assumption because inventory movements can make the two different.

Explain the operational tradeoff

Inventory and receivable days extend the cycle; supplier credit shortens it. A negative cycle is possible when customer cash arrives before supplier payments are due.

Compare periods and similar business models before judging the number. Reducing inventory too far can impair service, and stretching suppliers can have costs. CCC is a timing measure, not a complete cash forecast or a direct estimate of cash released.

WORKED EXAMPLE

A 60-day cash conversion cycle

For a 365-day period, $120,000 average inventory and $730,000 COGS produce 60 inventory days. $150,000 receivables and $1,095,000 credit sales produce 50 collection days. $90,000 payables and $657,000 credit purchases produce 50 payment days. The cash conversion cycle is 60 + 50 − 50 = 60 days.

Assumptions and limits

  • Operating totals and average balances refer to the same reporting period and currency.
  • Sales, purchases and COGS must be positive for these ratios to be meaningful.
  • Use trade receivables and trade payables attributable to the operating activity being analyzed.
  • No industry benchmark, seasonality adjustment or future cash-flow forecast is inferred.

Common questions

Can the cash conversion cycle be negative?

Yes. In this model, payable days greater than inventory plus receivable days produce a negative cycle. Whether that is sustainable depends on the business and its commercial terms.

Should I use revenue or credit sales for DSO?

Use credit sales that match the trade receivables. Total revenue is a proxy only when appropriate; including substantial cash sales can understate the collection period.

Can I use quarterly figures?

Yes. Enter average balances for the quarter, that quarter’s operating totals and the number of days in the quarter. Do not combine quarterly balances with annual flows without aligning the calculation.

Sources and methodology

Reviewed November 6, 2026. Sources support the method described above. Examples are illustrative; results depend on your inputs and require your review.