Cash Conversion Cycle Calculator
Calculate CCC, DSO, DIO, and DPO for working capital management and cash flow analysis
Calculate Cash Conversion Cycle
Total sales revenue for the analysis period
Direct production costs for the period
(Beginning inventory + Ending inventory) ÷ 2
Money owed by customers on credit sales
Money owed to suppliers
Time period for the analysis
Cash Conversion Cycle Results
Formula: CCC = DSO + DIO - DPO
Calculation: 0.0 days + 0.0 days - 0.0 days = 0.0 days
Cycle Analysis
Example: Walmart 2020 Analysis
Walmart Financial Data (2020)
Total Revenue: $523,964 million
Cost of Goods Sold: $394,605 million
Average Inventory: $44,352 million
Average Accounts Receivable: $6,283.5 million
Average Accounts Payable: $47,021.5 million
Analysis Period: 365 days
Calculated Results
DSO: 4.4 days
DIO: 41.0 days
DPO: 43.5 days
CCC: 1.9 days
Walmart's excellent CCC of 1.9 days shows highly efficient working capital management.
CCC Components
Days Sales Outstanding
Time to collect receivables
Lower is better
Days Inventory Outstanding
Time to sell inventory
Lower is better
Days Payable Outstanding
Time to pay suppliers
Higher is better
CCC Benchmarks
Optimization Tips
Reduce DSO: Improve collection processes
Reduce DIO: Optimize inventory management
Increase DPO: Negotiate longer payment terms
Monitor trends over time
Compare with industry benchmarks
Understanding Cash Conversion Cycle
What is Cash Conversion Cycle?
The Cash Conversion Cycle (CCC) measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales. It represents the complete business operating process from raw material acquisition to cash collection.
Why is CCC Important?
- •Measures working capital efficiency
- •Indicates cash flow timing
- •Helps optimize operations
- •Identifies financing needs
Formula Breakdown
CCC = DSO + DIO - DPO
DSO = Avg A/R ÷ (Revenue ÷ Days)
DIO = Avg Inventory ÷ (COGS ÷ Days)
DPO = Avg A/P ÷ (COGS ÷ Days)
Negative CCC: Suppliers are effectively financing your operations, creating a cash float that can be invested for additional returns.
Industry Comparisons
| Industry | Typical CCC Range | Key Characteristics |
|---|---|---|
| Retail (Walmart) | -20 to +10 days | Fast inventory turnover, quick payments |
| Technology (Amazon) | -20 to 0 days | Extended supplier terms, efficient operations |
| Manufacturing | 60-120 days | Higher inventory levels, longer production cycles |
| Services | 20-60 days | Lower inventory, focus on receivables management |