Compute days sales outstanding, days inventory outstanding, days payable outstanding, and the cash conversion cycle.
| DSO (days) | – |
| DIO (days) | – |
| DPO (days) | – |
| CCC (days) | – |
Use this cash-conversion-cycle calculator to see how many days cash is tied up between paying suppliers and collecting from customers. A shorter (even negative) CCC is usually better.
DSO = 365 × receivables ÷ sales. DIO = 365 × inventory ÷ COGS. DPO = 365 × payables ÷ COGS. CCC = DSO + DIO − DPO. Use the same year of figures throughout; 365 is the year length used here. Receivables, inventory, and payables can be period-end or averages.
Receivables: Trade receivables (AR).
Inventory: Inventory on the balance sheet.
Payables: Trade payables (AP).
Sales: Annual (or trailing-twelve-month) sales.
COGS: Annual cost of goods sold (used for inventory and payables days).
DSO: Days sales outstanding.
DIO: Days inventory outstanding.
DPO: Days payable outstanding.
CCC: Cash conversion cycle in days.
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