{
  "id": "cash-conversion-cycle",
  "version": "86df132078bc",
  "status": "published",
  "name": "Cash Conversion Cycle Calculator",
  "question": "What is my cash conversion cycle?",
  "summary": "Computes the cash conversion cycle in days: days of inventory plus days sales outstanding minus days payables outstanding, from sales, cost of goods sold and balances.",
  "category": "finance",
  "subcategory": "business",
  "url": "https://www.acalculator.org/finance/cash-conversion-cycle-calculator",
  "markdown": "https://www.acalculator.org/finance/cash-conversion-cycle-calculator.md",
  "kind": "function",
  "method": "Average balance = (start + end) ÷ 2, or the end balance alone. Days of inventory = average inventory ÷ cost of goods sold × days. Days sales outstanding = average accounts receivable ÷ credit sales × days. Days payables outstanding = average accounts payable ÷ cost of goods sold × days. Cash conversion cycle = days of inventory + days sales outstanding − days payables outstanding.",
  "assumptions": [
    "Sales and cost of goods sold cover the period whose days you enter; the balances are from its start and end.",
    "Each period equals days ÷ turnover, where turnover = sales or cost of goods sold ÷ average balance.",
    "Arithmetic is exact on the typed decimals; days show to 2 decimals, halves up."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "rev": {
        "title": "Credit sales",
        "description": "Sales on credit for the period. Use net sales if credit sales are not shown.",
        "type": "number",
        "x-unit": "USD",
        "exclusiveMinimum": 0,
        "maximum": 1000000000000000
      },
      "cogs": {
        "title": "Cost of goods sold",
        "description": "Cost of goods sold for the same period.",
        "type": "number",
        "x-unit": "USD",
        "exclusiveMinimum": 0,
        "maximum": 1000000000000000
      },
      "ib": {
        "title": "Inventory at the start",
        "description": "Leave empty to use the ending balance alone, or type an average as the ending balance.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "ie": {
        "title": "Inventory at the end",
        "description": "Inventory on the balance sheet at the end of the period.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "arb": {
        "title": "Accounts receivable at the start",
        "description": "Leave empty to use the ending balance alone, or type an average as the ending balance.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "are": {
        "title": "Accounts receivable at the end",
        "description": "What customers owe at the end of the period.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "apb": {
        "title": "Accounts payable at the start",
        "description": "Leave empty to use the ending balance alone, or type an average as the ending balance.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "ape": {
        "title": "Accounts payable at the end",
        "description": "What the business owes suppliers at the end of the period.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000000000000
      },
      "days": {
        "title": "Days in the period",
        "description": "The days the sales cover: 365 for a year, 90 or 91 for a quarter.",
        "type": "integer",
        "minimum": 1,
        "maximum": 366
      }
    }
  },
  "outputs": {
    "ccc": {
      "label": "Cash conversion cycle (days)",
      "description": "Days of inventory + days sales outstanding − days payables outstanding.",
      "format": "number"
    },
    "dio": {
      "label": "Days of inventory (DIO)",
      "description": "Average inventory ÷ cost of goods sold × days in the period.",
      "format": "number"
    },
    "dso": {
      "label": "Days sales outstanding (DSO)",
      "description": "Average accounts receivable ÷ credit sales × days in the period.",
      "format": "number"
    },
    "dpo": {
      "label": "Days payables outstanding (DPO)",
      "description": "Average accounts payable ÷ cost of goods sold × days in the period.",
      "format": "number"
    },
    "operating": {
      "label": "Operating cycle (days)",
      "description": "Days of inventory + days sales outstanding.",
      "format": "number"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "rev": 40000000,
      "cogs": 30000000,
      "ie": 3000000,
      "are": 6000000,
      "ape": 2800000,
      "days": 365
    },
    "outputs": {
      "ccc": 57.18333333333333,
      "dio": 36.5,
      "dso": 54.75,
      "dpo": 34.06666666666667,
      "operating": 91.25
    },
    "text": "With 36.5 days of inventory, 54.75 days to collect and 34.07 days to pay suppliers, the cash conversion cycle is 57.18 days."
  },
  "examples": [
    {
      "given": {
        "rev": 40000000,
        "cogs": 30000000,
        "ie": 3000000,
        "are": 6000000,
        "ape": 2800000,
        "days": 365
      },
      "expect": {
        "ccc": 57.18333333333333,
        "dio": 36.5,
        "dso": 54.75,
        "dpo": 34.06666666666667,
        "operating": 91.25
      },
      "source": "OpenStax, Principles of Finance, 19.1 What Is Working Capital? (cash cycle = inventory conversion period + receivables collection period − payables deferral period, each 365 ÷ turnover; King Sized Products). https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital: 36.5 + 54.7 − 34 = 57.2 days (rounded); exact 3431/60 (Python Fraction)"
    },
    {
      "given": {
        "rev": 40000000,
        "cogs": 30000000,
        "ie": 2800000,
        "are": 5500000,
        "ape": 3300000,
        "days": 365
      },
      "expect": {
        "ccc": 44.104166666666664,
        "dio": 34.06666666666667,
        "dso": 50.1875,
        "dpo": 40.15
      },
      "source": "OpenStax, Principles of Finance, 19.1 What Is Working Capital? (cash cycle = inventory conversion period + receivables collection period − payables deferral period, each 365 ÷ turnover; King Sized Products). https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital: 34.07 + 50.21 − 40.15 = 44.10 days in Table 19.2 (rounded); exact 2117/48 (Python Fraction)"
    },
    {
      "given": {
        "rev": 900000,
        "cogs": 600000,
        "ib": 110000,
        "ie": 130000,
        "arb": 70000,
        "are": 80000,
        "apb": 45000,
        "ape": 55000,
        "days": 360
      },
      "expect": {
        "ccc": 72,
        "dio": 72,
        "dso": 30,
        "dpo": 30,
        "operating": 102
      },
      "source": "OpenStax, Principles of Finance, 19.1 What Is Working Capital? (cash cycle = inventory conversion period + receivables collection period − payables deferral period, each 365 ÷ turnover; King Sized Products). https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (averages of start and end balances); hand calculation in content.mdx: 120,000 ÷ 600,000 × 360 = 72; 75,000 ÷ 900,000 × 360 = 30; 50,000 ÷ 600,000 × 360 = 30"
    },
    {
      "given": {
        "rev": 5000000,
        "cogs": 4000000,
        "ie": 100000,
        "are": 50000,
        "ape": 900000,
        "days": 365
      },
      "expect": {
        "ccc": -69.35,
        "dio": 9.125,
        "dso": 3.65,
        "dpo": 82.125,
        "operating": 12.775
      },
      "source": "hand calculation in content.mdx: 9.125 + 3.65 − 82.125 = −69.35 days"
    }
  ],
  "sources": [
    "OpenStax, Principles of Finance, 19.1 What Is Working Capital?: cash cycle = inventory conversion period + receivables collection period − payables deferral period; each period = 365 ÷ turnover, with inventory and payables turnover on cost of goods sold, receivables turnover on credit sales, and average balances of (beginning + ending) ÷ 2; King Sized Products (57.2 days before and 44.10 days after its changes). https://openstax.org/books/principles-finance/pages/19-1-what-is-working-capital (retrieved 2026-10-19)"
  ],
  "related": [
    "cash-flow",
    "operating-income",
    "interest-coverage-ratio",
    "capex"
  ],
  "changelog": []
}