Cash Conversion Cycle Calculator

✖Days Inventory Outstanding (DIO) is the average number of days that a company holds its inventory before selling it.ⓘ Days Inventory Outstanding [DIO]			+10% -10%
✖Days Sales Outstanding represents the collection efficiency of credit sales and measures the average number of days a company takes to collect cash from credit sales.ⓘ Days Sales Outstanding [DSO]			+10% -10%
✖Days Payables Outstanding calculates the average number of days a company takes to pay its suppliers.ⓘ Days Payables Outstanding [DPO]			+10% -10%

✖The Cash Conversion Cycle, also known as the cash cycle is a metric expressing how many days it takes a company to convert the cash it spends on inventory back into cash by selling its product.ⓘ Cash Conversion Cycle [CCC]

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Formula

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Cash Conversion Cycle

Formula

`"CCC" = "DIO"+"DSO"-"DPO"`

Example

`"65"="70"+"10"-"15"`

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Cash Conversion Cycle Solution

STEP 0: Pre-Calculation Summary

Formula Used

Cash Conversion Cycle = Days Inventory Outstanding+Days Sales Outstanding-Days Payables Outstanding
CCC = DIO+DSO-DPO
This formula uses 4 Variables

Variables Used

Cash Conversion Cycle - The Cash Conversion Cycle, also known as the cash cycle is a metric expressing how many days it takes a company to convert the cash it spends on inventory back into cash by selling its product.
Days Inventory Outstanding - Days Inventory Outstanding (DIO) is the average number of days that a company holds its inventory before selling it.
Days Sales Outstanding - Days Sales Outstanding represents the collection efficiency of credit sales and measures the average number of days a company takes to collect cash from credit sales.
Days Payables Outstanding - Days Payables Outstanding calculates the average number of days a company takes to pay its suppliers.

STEP 1: Convert Input(s) to Base Unit

Days Inventory Outstanding: 70 --> No Conversion Required
Days Sales Outstanding: 10 --> No Conversion Required
Days Payables Outstanding: 15 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

CCC = DIO+DSO-DPO --> 70+10-15

Evaluating ... ...

CCC = 65

STEP 3: Convert Result to Output's Unit

65 --> No Conversion Required

FINAL ANSWER

65 <-- Cash Conversion Cycle

(Calculation completed in 00.004 seconds)

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Credits

Created by Kashish Arora

Satyawati College (DU), New Delhi

Kashish Arora has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 9 Cash Management Calculators

Merton Model

Go Distance to the Default = ln(Market Value of Company Assets/Market Value of Company Debt)+((Risk Free Interest Rate+(Volatility of Company Asset Value)^2/2)*Time to Maturity)/(Volatility of Company Asset Value*sqrt(Time to Maturity))

Baumol's Model

Go Cost of Providing a Service = sqrt((2*Cost of Conversion*Total Requirement of Cash)/Interest Rate)

Cash Conversion Cycle

Go Cash Conversion Cycle = Days Inventory Outstanding+Days Sales Outstanding-Days Payables Outstanding

Miller Orr Model

Go Miller Orr Model = 3*((3*Cost of Conversion*Variance)/(4*Interest Rate/360))^(1/3)

Cash Surrender Value

Go Cash Surrender Value = mod(Enhanced Accumulated Value,Surrender Charges)

Cash Coverage

Go Cash Coverage = Earnings before Interest and Taxes/Interest Expense

Cash Burn Rate

Go Net Burn = Total Monthly Cash Sales-Total Monthly Cash Expenses

Implied Cash Runway

Go Implied Cash Runway = Cash Balance/Net Burn

Cash Budget

Go Cash Budget = Total Receipts-Total Payments

Cash Conversion Cycle Formula

Cash Conversion Cycle = Days Inventory Outstanding+Days Sales Outstanding-Days Payables Outstanding
CCC = DIO+DSO-DPO

What is Cash Conversion Cycle?

The Cash Conversion Cycle (CCC) – also known as the cash cycle – is a metric expressing how many days it takes a company to convert the cash it spends on inventory back into cash by selling its product. The shorter a company’s CCC, the less time it has money tied up in accounts receivable and inventory.
The cash cycle is an important working capital metric for all companies that buy and manage inventory. It’s an indicator of operational efficiency, liquidity risk, and overall financial health. That said, it should not be looked at in isolation, but in conjunction with other financial metrics such as return on equity. It is also important to note that the cash cycle is not a significant consideration for companies that don’t hold physical inventory.

How to Calculate Cash Conversion Cycle?

Cash Conversion Cycle calculator uses Cash Conversion Cycle = Days Inventory Outstanding+Days Sales Outstanding-Days Payables Outstanding to calculate the Cash Conversion Cycle, The Cash Conversion Cycle formula is defined as a metric expressing how many days it takes a company to convert the cash it spends on inventory back into cash by selling its product. Cash Conversion Cycle is denoted by CCC symbol.

How to calculate Cash Conversion Cycle using this online calculator? To use this online calculator for Cash Conversion Cycle, enter Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO) & Days Payables Outstanding (DPO) and hit the calculate button. Here is how the Cash Conversion Cycle calculation can be explained with given input values -> 65 = 70+10-15.

FAQ

What is Cash Conversion Cycle?

The Cash Conversion Cycle formula is defined as a metric expressing how many days it takes a company to convert the cash it spends on inventory back into cash by selling its product and is represented as CCC = DIO+DSO-DPO or Cash Conversion Cycle = Days Inventory Outstanding+Days Sales Outstanding-Days Payables Outstanding. Days Inventory Outstanding (DIO) is the average number of days that a company holds its inventory before selling it, Days Sales Outstanding represents the collection efficiency of credit sales and measures the average number of days a company takes to collect cash from credit sales & Days Payables Outstanding calculates the average number of days a company takes to pay its suppliers.

How to calculate Cash Conversion Cycle?

The Cash Conversion Cycle formula is defined as a metric expressing how many days it takes a company to convert the cash it spends on inventory back into cash by selling its product is calculated using Cash Conversion Cycle = Days Inventory Outstanding+Days Sales Outstanding-Days Payables Outstanding. To calculate Cash Conversion Cycle, you need Days Inventory Outstanding (DIO), Days Sales Outstanding (DSO) & Days Payables Outstanding (DPO). With our tool, you need to enter the respective value for Days Inventory Outstanding, Days Sales Outstanding & Days Payables Outstanding and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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