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Cash Conversion Cycle Calculator: DSO + DIO − DPO
The cash conversion cycle (CCC) measures how long cash is tied up between paying suppliers and collecting from customers. It combines three numbers: how long customers take to pay (DSO), how long inventory sits (DIO), and how long you take to pay suppliers (DPO).
Enter balances to compute each from your balance sheet and income statement, or switch to entering the days directly. The calculator also values each day in dollars and lets you test a change in each lever. The example values are illustrative; replace them with yours.
Scenario: change each lever
Your results
Cash conversion cycle
80.2 days
DSO + DIO − DPO.
DSO
41.1 days
DIO
76.0 days
DPO
36.9 days
Cash value of one day
$131,507 (DSO) · $92,055 (DIO, DPO)
DSO days are valued at revenue per day; DIO and DPO days at COGS per day.
Scenario cash conversion cycle
62.2 days
A change of -18.0 days.
Cash released by the scenario
$1,854,247
DSO $657,534 · DIO $920,548 · DPO $276,164. A negative figure means the scenario ties up cash.
Free template · Excel workbook
Working Capital Diagnostic Workbook
DSO, DIO, DPO and cash conversion cycle from your balances, with the cash value of a day and a lever-by-lever release plan.
Illustrative example values are prefilled; replace them with your own. Everything is calculated in your browser, and Performis does not store what you enter. Our analytics record which calculator was used and a few summary figures, such as a rounded result.
The formulas
- Days sales outstanding (DSO)
- DSO = AR ÷ revenue × days in period
- Days inventory outstanding (DIO)
- DIO = inventory ÷ COGS × days in period
- Days payables outstanding (DPO)
- DPO = AP ÷ COGS × days in period
- Cash conversion cycle (CCC)
- CCC = DSO + DIO − DPO
- Cash value of one day
- DSO: revenue ÷ days in period. DIO and DPO: COGS ÷ days in period.
- Scenario cash released
- −ΔDSO × revenue per day − ΔDIO × COGS per day + ΔDPO × COGS per day
How to interpret your result
Look at the three components, not just the total
The same CCC can come from very different mixes. A long DIO calls for planning and purchasing changes; a long DSO calls for collections and billing changes.
Compare against your own history and terms
Measure the cycle the same way each period and watch the direction. Compare DSO with your customer terms and DPO with your supplier terms to see where you are off terms.
Use the scenario as a sizing tool
The cash released is a one-time estimate at constant revenue and COGS. It shows which lever is worth the effort; it is not a forecast that the change is achievable.
Mind the trade-offs
Stretching payables can strain suppliers, and cutting inventory can hurt service levels. A shorter cycle is only better if it does not cost more elsewhere.
Check your period matches your balances
Use period-end balances with revenue and COGS for the same period. Seasonal businesses may prefer averages of several balance dates.
Frequently asked questions
What is the cash conversion cycle?
It is the number of days between paying for inventory and collecting cash from the customer who bought it: days sales outstanding plus days inventory outstanding minus days payables outstanding.
How do you calculate the cash conversion cycle?
CCC = DSO + DIO − DPO. DSO is AR ÷ revenue × days, DIO is inventory ÷ COGS × days, and DPO is AP ÷ COGS × days.
Can the cash conversion cycle be negative?
Yes. If you collect from customers before you pay suppliers, DPO exceeds DSO plus DIO and the cycle is negative, meaning suppliers are effectively financing your operations.
Which lever should I work on first?
Use the scenario to compare them. Collections (DSO) are valued at revenue per day while inventory and payables days are valued at cost of goods sold per day, so the same number of days is worth different amounts. Also weigh customer and supplier relationships, not just the dollars.
Is my data stored or sent anywhere?
No. All calculations run in your browser and nothing you enter is collected or saved.
Take it further with a template
Free template · Excel workbook
Working Capital Diagnostic Workbook
DSO, DIO, DPO and cash conversion cycle from your balances, with the cash value of a day and a lever-by-lever release plan.
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