Northstar Calculators logoNorthstar Finance
Finance · Small business and commerce

Cash Conversion Cycle Calculator

Map how receivables, inventory, and supplier payment timing relate to a working-capital cycle. Enter balances and daily rates from the same period and accounting basis.

$
Supported range: 0–1000000000000. Average customer invoices not yet collected.
$
Supported range: 0–1000000000. Use credit sales for the same period as receivables.
$
Supported range: 0–1000000000000. Use inventory valued on the same cost basis as COGS.
$
Supported range: 0–1000000000. Daily COGS used for inventory and payable days.
$
Supported range: 0–1000000000000. Supplier balances on the same cost basis.

Method and assumptions

DSO = average receivables ÷ daily credit sales. DIO = average inventory ÷ daily COGS. DPO = average payables ÷ daily COGS. Cash conversion cycle = DSO + DIO − DPO. The balance view is receivables + inventory − payables; it is not cash flow or a valuation. When a daily flow is zero, its associated balance must also be zero because days cannot be calculated from a zero denominator.

Worked example

With $9,000 receivables on $1,000 daily credit sales, DSO is 9 days. $6,000 inventory and $4,000 payables at $500 daily COGS give DIO 12 and DPO 8, so the cycle is 13 days. The three balances imply $11,000 net tied in this simplified view.

How to use the result

Compare these measures across consistently defined periods to identify where cash is held. Positive daily credit sales and daily COGS are required to define their day ratios, even when a related balance is zero; align calendar conventions and accounting definitions before acting.

Input meanings and limits

  • Average accounts receivable: Average customer invoices not yet collected.
  • Credit sales per day: Use credit sales for the same period as receivables.
  • Average inventory value: Use inventory valued on the same cost basis as COGS.
  • Cost of goods sold per day: Daily COGS used for inventory and payable days.
  • Average accounts payable: Supplier balances on the same cost basis.

Inputs accept finite, nonnegative values in the displayed ranges; percentages are bounded to 0–100% (with 99.99% maximum where division by the remaining share is used), and whole-unit or month fields require integers. Currency figures are shown in USD for convenience; enter values in one consistent currency. This is a planning worksheet, not financial, legal, tax, or accounting advice.

Related calculators

Receivables aging collection forecast and Inventory reorder point calculator.

Creator & reviewers

Creator persona

Reviewer personas

These names are pseudonymous editorial personas used to organize Northstar's work, not separate verified contributors. Reviewer assignments describe editorial responsibilities, not completed independent reviews or professional credentials. About our editorial personas.