Cash Conversion Cycle Calculator

Combine inventory, receivable and payable days to find how long cash is tied up in the operating cycle.

About Cash Conversion Cycle Calculator

Inventory and receivable days consume cash while payable days supply it, so the net figure is how many days of trading you must fund yourself. Multiplying by daily revenue converts the cycle into the actual cash trapped in it. A negative cycle means customers pay before suppliers do, which lets a business grow without external funding — the structural advantage behind many large retailers.

Formula

Cash Conversion Cycle

Cash conversion cycle = days inventory + days receivable − days payable

operating cycle: Days from buying stock to collecting cash
days payable: Days of free credit taken from suppliers

Worked example

With the default values below, Cash Conversion Cycle Calculator returns Cash Conversion Cycle of 62.0. Change any input above and every figure here is recalculated in your browser.

Inputs used

Days inventory outstandingaccepts 0–400 days: 61 days
Days sales outstandingaccepts 0–400 days: 46 days
Days payable outstandingaccepts 0–400 days: 45 days
Annual revenueminimum 0: 1,200,000

Results

Cash Conversion Cycle: 62.0 days
Operating Cycle: 107.0 days
Cash Tied Up in the Cycle: $203,835.62
Cycles per Year: 5.89
Verdict: Typical for a trading business

Step by step

1Values used
2Cash Conversion Cycle
3Cash Conversion Cycle= 62.0 days
4Operating Cycle= 107.0 days
5Cash Tied Up in the Cycle= 203,835.62
6Cycles per Year= 5.89
7Verdict= Typical for a trading business

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Cash Conversion Cycle calculated?

Cash conversion cycle = days inventory + days receivable − days payable Inventory and receivable days consume cash while payable days supply it, so the net figure is how many days of trading you must fund yourself. Multiplying by daily revenue converts the cycle into the actual cash trapped in it.

Why does Cash Conversion Cycle matter?

A negative cycle means customers pay before suppliers do, which lets a business grow without external funding — the structural advantage behind many large retailers.

What values do I need to enter?

This calculator takes 4 inputs: Days inventory outstanding, Days sales outstanding, Days payable outstanding, Annual revenue. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.