The formula: Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding. It measures the gap between when you pay your suppliers and when you collect from your customers. This tool uses year-end (or average, if you have it) balance sheet figures — for a more precise number, use the average of your beginning and ending balances.
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Days of Cash Tied Up
DIO (Inventory)
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DSO (Receivables)
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DPO (Payables)
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For educational purposes only. This calculator uses simplified point-in-time balances rather than period averages, and a straight 365-day year. Actual working capital needs depend on seasonality, growth rate, and the specific timing of cash flows within the year. Nothing here constitutes financial advice or a discouragement from applying for credit. Every person has the right to apply for credit from any lender.