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Cash Conversion Cycle Calculator — Supply Chain Working Capital

Calculate your cash conversion cycle (CCC) — how many days cash is tied up in inventory and receivables before it returns. A key supply chain finance metric.

Quick answer: CCC = DIO + DSO − DPO. Shorter CCC = less working capital needed. Best-in-class logistics companies achieve CCC under 30 days. Negative CCC (like Amazon) means suppliers fund your operations.

💹 Cash Conversion Cycle Calculator

Cash Conversion Cycle
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Days Inventory (DIO)
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Days Receivables (DSO)
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How to Use This Calculator

  1. Enter average inventory — average of beginning and ending inventory for the period.
  2. Enter COGS and revenue — from your income statement for the same period.
  3. Enter average receivables and payables — average of beginning and ending balances.
  4. Review each component — DIO, DSO and DPO individually to identify the biggest working capital opportunity.

Worked Example

Avg inventory $500K, COGS $3M, avg receivables $280K, revenue $5M, avg payables $180K.

  1. DIO: $500,000 ÷ ($3,000,000 ÷ 365) = 60.8 days
  2. DSO: $280,000 ÷ ($5,000,000 ÷ 365) = 20.4 days
  3. DPO: $180,000 ÷ ($3,000,000 ÷ 365) = 21.9 days
  4. CCC: 60.8 + 20.4 − 21.9 = 59.3 days

The 60.8-day DIO is the biggest opportunity. Reducing to 45 days through better forecasting and inventory management would cut CCC by 15 days and free ~$206,000 in working capital.

Frequently Asked Questions

Benchmarks vary by industry. Distribution/wholesale: 30–60 days is typical; best performers achieve under 30. Manufacturing: 60–90 days is common. Retail: 20–40 days. Negative CCC means the business collects cash before paying suppliers — a sign of strong working capital management.

Reduce DIO: improve demand forecasting, cut slow-moving SKUs, implement just-in-time procurement. Reduce DSO: tighten credit terms, offer early payment discounts, improve collections. Increase DPO: negotiate longer supplier payment terms, use supply chain finance programs. Each lever has tradeoffs — reducing DIO too aggressively causes stockouts; extending DPO strains supplier relationships.