Cash Conversion Cycle Calculator
Measure how long your cash is typically tied up in inventory,
customer receivables and supplier payments.
Inputs
Average number of days inventory remains in the business before being sold.
Average number of days customers take to pay after a sale.
Average number of days the business takes to pay suppliers.
Calculate
Reset
Cash Conversion Cycle Formula
Cash Conversion Cycle =
Inventory Days + Receivable Days − Payable Days
Example
Suppose a business has:
- Inventory Days = 45 days
- Receivable Days = 30 days
- Payable Days = 40 days
Operating Cycle = 45 + 30 = 75 days.
Cash Conversion Cycle = 75 − 40 =
35 days.
This means cash is typically tied up in the operating cycle
for approximately 35 days.
Why It Matters
The Cash Conversion Cycle connects profitability with cash flow.
A profitable business can still face cash pressure if too much
cash is tied up in inventory or customer receivables.
Businesses can improve the cycle by reducing inventory days,
collecting customer receivables faster, or negotiating longer
supplier payment terms.