The cash conversion cycle measures how many days cash is tied up between paying suppliers and collecting from customers: DSO plus DIO minus DPO. This calculator works it out for each period from figures you already have on the balance sheet and P&L, and shows the cash value of one day of DSO so improvements can be sized in dollars rather than days. Pair it with our software category guides to see which tools fit your team. Once you have a shortlist, check the vendor profiles and the finance glossary for unfamiliar terms, then use our head-to-head comparisons before your first demo.
Built for: CFO, Controller, FP&A manager, Treasury manager
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Enter one row per period. Use the same period length throughout, usually quarters or months. Enter the actual number of days in each period, since quarters range from 90 to 92 days.
Choose ending or average balances and stick to it. The example uses period-end balances. Average balances (opening plus closing, divided by two) smooth out spikes; either is fine if used consistently.
Read the results by component. Look at which of DSO, DIO, or DPO moved, not just the CCC total. A falling CCC driven by stretching suppliers is a different story from one driven by faster collections.
Size the opportunity in dollars. Multiply revenue per day by the days of DSO you think you can remove. That is the one-off cash released, before any effect on growth.
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One row per period. Revenue and COGS are for the period; AR, inventory, and AP are balances at period end (or averages, if you prefer).
| Period | Days in period | Revenue | COGS | Accounts receivable | Inventory | Accounts payable |
|---|---|---|---|---|---|---|
| Q1 2025 | 90 | 11,800,000 | 7,080,000 | 5,900,000 | 3,850,000 | 2,450,000 |
| Q2 2025 | 91 | 12,400,000 | 7,440,000 | 6,350,000 | 4,050,000 | 2,520,000 |
More free templates finance teams use alongside this one.
A 13-week cash flow forecast is built from cash, not from the P&L. It uses the direct method: what will actually land in and leave the bank each week. This 13 week cash flow template rolls closing cash forward automatically, checks every week against your minimum cash threshold and revolver availability, and includes a variance-to-actual log, because a forecast that is never compared with the bank statement never gets better.
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A payment run is the moment cash actually leaves the business, so it deserves the same rigour as the close. This checklist takes the run from cash position and invoice selection through approval, release, and reconciliation. It includes an early-payment discount calculator, since a 2/10 net 30 discount is worth about 37% a year and is often missed because nobody worked it out.
It is the number of days between paying for inventory and collecting cash from customers, calculated as days sales outstanding plus days inventory outstanding minus days payable outstanding. A lower number means less cash tied up in working capital.
DSO is accounts receivable divided by revenue, times days in the period. DIO is inventory divided by COGS, times days. DPO is accounts payable divided by COGS, times days. Use period-end or average balances consistently.
Yes. If a company collects from customers before it pays suppliers, for example with upfront payment and long supplier terms, DPO exceeds DSO plus DIO and the cycle is negative. The business is then partly funded by its suppliers.
It depends heavily on industry and business model, so compare against your own trend and close peers rather than a general figure. The direction of each component over time is usually more useful than the absolute number.
