Cash conversion cycle calculator
- Formula
- DSO + DIO − DPO
CCC = DSO + DIO − DPO90 for a quarter, 365 for a year.
Cash conversion cycle
49.0 days
How it’s worked out
- 1DSO($600,000 ÷ $1,500,000) × 9036.0 days
- 2DIO($450,000 ÷ $900,000) × 9045.0 days
- 3DPO($320,000 ÷ $900,000) × 9032.0 days
- 4Cash conversion cycleDSO + DIO − DPO49.0 days
Runs in your browser; nothing you type is sent anywhere. Amounts in US dollars.
Worked on a real month of books
Northwind Traders, Inc., September 2026 (accrual basis, USD), the month the free course is taught on. Every figure is read off the course's posted ledger, not typed.
- 1DSO($8,000 ÷ $22,000) × 3010.9 days
- 2DIO($1,000 ÷ $17,000) × 301.8 days
- 3DPO($6,000 ÷ $17,000) × 3010.6 days
- 4Cash conversion cycleDSO + DIO − DPO2.1 days
See the statements these come from in the course.
How to read it
The cycle adds the days cash is tied up in inventory and receivables and subtracts the days suppliers fund it.
A shorter cycle means each dollar of growth needs less working capital. It is the single best summary of how a product business uses cash.
Common mistakes
- Mixing periods: all three day counts must use the same days and the same period's flows.
- Computing it for a pure-service business with no inventory and reading DIO as meaningful.
Questions
- What does the cash conversion cycle measure?
- The number of days between paying for inventory and collecting cash from the customer who bought it.
- Can the cash conversion cycle be negative?
- Yes. When suppliers are paid after customers pay, the cycle is negative and growth generates cash rather than consuming it.
Read it with
The metrics read alongside this one, and the terms it is confused with.
- DSO vs DPODSO measures how many days of sales are still uncollected; DPO measures how many days of purchases are still unpaid — together with inventory days they make the cash conversion cycle.Compare
- DSO calculatorDSO is a liquidity and working-capital metric, calculated as (Ending AR ÷ Credit sales for the period) × Days in the period.Calculator
- DIO calculatorDIO is a liquidity and working-capital metric, calculated as (Inventory ÷ COGS for the period) × Days in the period.Calculator
- DPO calculatorDPO is a liquidity and working-capital metric, calculated as (Ending AP ÷ COGS for the period) × Days in the period.Calculator
- CCCCCC is a liquidity and working-capital metric, calculated as DSO + DIO − DPO.Term
The formula is the one the glossary states, and the arithmetic is unit-tested. A ratio with nothing to divide by shows a dash — undefined is not zero. General information, not financial advice.