Cash Conversion Cycle Calculator
Combine inventory days, receivable days and payable days into one number that shows how long cash is tied up in operations.
Quick answer
The cash conversion cycle is the days cash is tied up in operations: days inventory (DIO) plus days sales outstanding (DSO) minus days payables (DPO). A negative result means suppliers fund the cycle.
Cash Conversion Cycle Calculator
Days Inventory (DIO)
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Days Sales Outstanding (DSO)
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Days Payables (DPO)
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Operating Cycle (DIO + DSO)
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Cash Conversion Cycle
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Component Breakdown
| Component | Balance (₹) | Basis (₹) | Turnover (×) | Days |
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Assumptions & method
- DIO = average inventory ÷ COGS × days. DSO = average receivables ÷ revenue × days. DPO = average payables ÷ COGS × days.
- Cash conversion cycle = DIO + DSO − DPO. A negative result means suppliers fund more than the operating cycle needs.
- Turnover = basis ÷ balance, so days = period days ÷ turnover. All results are rounded for display.
- Revenue is assumed to be credit sales. Cash sales would make DSO look shorter than the real collection time.
- Seasonality, one-off balances, advance payments from customers and different payment terms across customers are not modelled.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How the cash conversion cycle works
The cash conversion cycle follows a unit of cash through the business. Cash goes out to buy inventory, the inventory sits until it is sold, the sale becomes a receivable, and finally the customer pays. Days inventory outstanding and days sales outstanding add to the time cash is locked up, while days payables outstanding subtracts the time suppliers finance you. The result, in days, tells you how much working capital the operating cycle needs. A shorter or negative cycle usually means less funding is needed, while a lengthening cycle can warn of cash pressure before profits show it.