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Cash Conversion Cycle Calculator

Combine days inventory, days sales and days payable outstanding into the cash conversion cycle — how long cash is tied up.

Days inventory outstanding (DIO)

Days sales outstanding (DSO)

Days payable outstanding (DPO)

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How it works

Cash conversion cycle = DIO + DSO − DPO · Operating cycle = DIO + DSO

The cash conversion cycle measures how many days cash is locked up in operations before it comes back as collected sales. You buy or make inventory (DIO days), sell it and wait to get paid (DSO days), but supplier credit (DPO days) delays your own cash outflow, so it is subtracted. A shorter — or even negative — cycle means the business self-funds its growth; a long cycle forces you to finance the gap with cash or debt.

Worked example

With 55 days inventory outstanding, 45 days sales outstanding and 30 days payable outstanding, the cash conversion cycle is 55 + 45 − 30 = 70 days. Cash spent on inventory takes about 70 days to return as collected revenue.

Frequently asked questions

What does a negative cash conversion cycle mean?

It means you collect from customers before you have to pay suppliers, so suppliers effectively finance your operations. Retailers like Amazon and grocery chains often run negative cycles — a powerful, interest-free source of working capital.

How do I shorten the cash conversion cycle?

Sell inventory faster (lower DIO), collect receivables sooner (lower DSO), or negotiate longer payment terms with suppliers (higher DPO). Each day cut frees up cash without borrowing.

Where do I get DIO, DSO and DPO?

Calculate each from your financials: DIO from inventory and cost of goods, DSO from receivables and revenue, DPO from payables and cost of goods. This site has a dedicated calculator for each.

Related calculators

Days Inventory Outstanding Calculator

Calculate DIO — the average number of days inventory sits before it sells — from average inventory and cost of goods sold.

Days Payable Outstanding Calculator

Calculate DPO — the average number of days your business takes to pay its suppliers, from accounts payable and cost of goods.

Days Sales Outstanding (DSO) Calculator

Calculate DSO — the average number of days it takes to collect payment — from accounts receivable and credit sales over a period.

Working Capital Turnover Calculator

Measure how efficiently working capital generates sales — revenue divided by net working capital, plus the working-capital figure itself.

Educational estimate, not financial, tax or investment advice.