Cash Conversion Cycle Calculator (DSO, DIO, DPO)
Enter yearly revenue and cost of goods sold, and the average receivables, inventory and payables.
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Cash Conversion Cycle Calculator (DSO, DIO, DPO) by TheCalcTools
How the Cash Conversion Cycle Calculator (DSO, DIO, DPO) works
The cash conversion cycle measures how long cash is tied up between paying for stock and collecting from customers: days of inventory + days to collect − days you take to pay suppliers.
A shorter cycle frees cash. Some retailers run negative cycles, collecting from customers before paying suppliers.
The formula
Worked example
Using the default values shown in the calculator:
| Yearly revenue | $3.65e+06 |
|---|---|
| Yearly cost of goods sold | $2.19e+06 |
| Average accounts receivable | $400000 |
| Average inventory | $360000 |
| Average accounts payable | $240000 |
- DSO 40.0 + DIO 60.0 − DPO 40.0 = 60.0 days.
Result:
| Days sales outstanding (DSO) | 40.0 |
|---|---|
| Days inventory outstanding (DIO) | 60.0 |
| Days payables outstanding (DPO) | 40.0 |
| Cash conversion cycle (days) | 60.0 |
Frequently asked questions
How can I shorten the cycle?
Collect faster (invoice promptly, offer early-payment discounts), hold less stock, and negotiate longer supplier terms.
Sources and further reading
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This calculator gives estimates for information only. Check important results independently before you rely on them. See our disclaimer.