Cash Conversion Cycle Calculator

days
Average days to sell inventory
days
Average days to collect receivables
days
Average days to pay suppliers
Finance

Calculate how many days it takes your business to convert inventory and receivables into cash, minus payables. CCC = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) − Days Payables Outstanding (DPO). A shorter CCC means faster cash recovery.

Formula

CCC = DIO + DSO − DPO
  • DIO (Days Inventory Outstanding) = how many days inventory sits before selling.
  • DSO (Days Sales Outstanding) = how many days it takes to collect payment after a sale.
  • DPO (Days Payables Outstanding) = how many days you take to pay suppliers.
  • CCC = DIO + DSO − DPO = the net time your cash is tied up in operations.
  • A shorter (or negative!) CCC is better: it means you turn inventory and receivables into cash quickly, or even collect from customers before paying suppliers.
  • Negative CCC: you receive cash from customers before you pay suppliers — a cash windfall (common in retail with fast inventory turnover and slow supplier payment terms).

DIO=45, DSO=30, DPO=40

Inputs
  • Days Inventory Outstanding (DIO): 45 days
  • Days Sales Outstanding (DSO): 30 days
  • Days Payables Outstanding (DPO): 40 days

CCC = 45 + 30 − 40 = 35 days. Your cash is tied up for 35 days between paying for inventory and collecting from customers.

Frequently asked questions

What is a good CCC?
Lower is better. Negative CCC is ideal (you collect cash before paying suppliers). Retail often has CCC < 30 days; manufacturing may be 60–90 days.
How can I reduce my CCC?
Reduce DIO (sell inventory faster), reduce DSO (collect receivables sooner), or increase DPO (negotiate longer payment terms with suppliers).
Can CCC be negative?
Yes! If you collect from customers faster than you pay suppliers (common in retail or tech SaaS), you have a negative CCC — you're operating on your suppliers' cash.
How do I calculate DIO, DSO, and DPO from financials?
DIO = (Inventory ÷ COGS) × 365. DSO = (Accounts Receivable ÷ Revenue) × 365. DPO = (Accounts Payable ÷ COGS) × 365.
Is a high CCC always bad?
It ties up cash, but some industries (heavy manufacturing, luxury goods) naturally have longer cycles. Compare your CCC to industry peers.