Cash Conversion Cycle Calculator
Measure how quickly your business converts operations into cash. Calculate DSO, DIO, DPO, and your overall CCC — and see if a working capital gap is costing you.
Sales & Receivables
Use average balances over the period (beginning + ending ÷ 2)
Average AR balance for the period
Total credit sales for the period
Inventory & Cost of Goods
Service businesses: set Inventory to $0
Average inventory balance for the period
Total COGS for the period
Payables & Period
Average AP balance for the period
Results
How CCC Is Calculated
Each component maps to a different stage of your operating cycle. All three must be managed together.
Days Sales Outstanding (DSO)
DSO = (AR ÷ Sales) × Period
How long customers take to pay invoices. High DSO signals collection issues or overly generous credit terms. The fastest lever to pull in most service businesses.
Days Inventory Outstanding (DIO)
DIO = (Inventory ÷ COGS) × Period
How long inventory sits before selling. High DIO ties up cash and increases obsolescence risk. Service businesses with no inventory have DIO = 0.
Days Payable Outstanding (DPO)
DPO = (AP ÷ COGS) × Period
How long before you pay suppliers. Higher DPO is better — you hold cash longer before it leaves. Negotiate net-45 or net-60 terms to improve this.
The full formula
CCC = DSO + DIO − DPO
Lower is better. Negative means you collect before you pay.
CCC by Industry
What counts as a "good" CCC varies widely. Compare your result against these typical ranges.
| Industry | Typical CCC | Key Driver |
|---|---|---|
| E-commerce / Retail | 20–50 days | Inventory turnover speed |
| Manufacturing | 60–100 days | Long production cycles + net-30/60 terms |
| Wholesale / Distribution | 40–80 days | Extended receivables from B2B buyers |
| Construction | 80–120 days | Milestone billing and retainage |
| Staffing / Services | 20–45 days | No inventory; DSO is the main lever |
| Restaurants / Food | −10–15 days | Cash sales; pay suppliers on net-30 |
| Healthcare / Medical | 45–90 days | Slow insurance reimbursement cycles |
| Technology (SaaS) | −30–20 days | Prepaid subscriptions offset receivables |
Use average balances
AR and Inventory should reflect averages over the period (beginning + ending ÷ 2). Point-in-time figures can skew results significantly, especially for seasonal businesses.
Match period to inputs
Use the same period for your financial inputs and the period selector. Mixing annual financials with a 90-day period produces misleading DSO, DIO, and DPO figures.
Service businesses
If you carry no inventory, set Average Inventory to $0. DIO will be zero and your CCC = DSO − DPO. Service CCCs are often short — sometimes negative.
Negative CCC takes negotiation
A negative CCC usually requires collecting before delivering (prepayment) or negotiating very long supplier terms. Both take relationship leverage and time to build.
Compare to peers, not absolutes
A 90-day CCC is alarming for a restaurant but normal for a steel manufacturer. Always benchmark against industry peers before drawing conclusions about efficiency.
CCC and financing decisions
A rising CCC signals growing working capital needs. If your CCC increases 20+ days year-over-year, explore invoice factoring, a revolving line, or an MCA to bridge the gap.
Frequently Asked Questions
Related Resources
Working Capital Tool
Calculate how much working capital your business needs to operate.
Financial Ratios Calculator
Benchmark liquidity and efficiency ratios alongside your CCC.
Invoice Factoring
Turn slow-moving receivables into immediate working capital.
Line of Credit
Flexible revolving credit to bridge cash flow timing gaps.
Bridge the Gap
Long CCC straining your cash flow?
Invoice factoring and revolving lines of credit are built for businesses with timing gaps — turning slow-moving receivables into immediate working capital. A Pezzula advisor can match you to the right product.