Days cash is locked in operations.

The cash conversion cycle (CCC) measures how long cash is tied up in operations. Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding. The shorter the cycle, the faster cash moves through the business. Negative cycles (common in supermarkets and fast-food) mean suppliers are financing operations - a remarkable working capital advantage.

45 days inventory + 45 days receivables - 30 days payables = 60-day CCC. For every 1 of daily revenue, 60 days of cash sit locked in working capital. On 10M annual revenue (27k/day), that's 1.64M tied up. Cut inventory or receivables by 15 days and you free 411k cash.

The three components pull in different directions. Lower inventory turns risk stockouts; faster receivables collection risks pushing away customers who value credit terms; slower supplier payments risks losing early-pay discounts and damaging relationships. Optimising CCC is a balancing act, not a single-lever push.

Run it with sensible defaults

Using days inventory of 45, days receivable of 45, days payable of 30, the calculation works out to 60.0 days. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Days Inventory (DIO), Days Receivable (DSO), and Days Payable (DPO) — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

CCC = days inventory + days receivables - days payables. Measured in days. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

What to do with a low result

A disappointing result is information, not a judgement. Pick the single input that dragged the figure down most and focus the next quarter on that one factor. Breadth-first improvement rarely works; depth-first on the worst input usually does.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.