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Working capital

Cash Conversion Cycle Calculator

Combine compatible inventory, receivable and payable day estimates. Preserve a negative cash cycle when supplier terms exceed operating days.

23 / RECONCILE OPERATING DAYS

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Starting values are illustrative. Use your own costs, rates and assumptions.

INPUT GROUP 01

Operating cycle

INPUT GROUP 02

Supplier payment timing

Check the assumptions before acting on a result.

Read the method and example

YOUR CALCULATION

The cash cycle combines entered operating-cycle day estimates.

Operating cycle (days)

75

Cash conversion cycle (days)

50

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Illustrative inputs loaded. Replace them with your own assumptions.

How the cash conversion cycle calculator works

The operating cycle is inventory days plus receivable days. The cash conversion cycle subtracts payable days from that total. Inputs are precomputed, nonnegative day estimates rather than individual dated invoices.

A negative result is retained. It means entered supplier-payment days exceed inventory-plus-collection days; it does not imply that every cash payment occurs after every sale. Day estimates must use comparable periods and balance definitions.

This reduced timing reconciliation does not calculate receivables from sales, payables from purchases or inventory days from COGS. It does not estimate financing cost, credit risk, seasonality or cash reserves. Use a dated cash schedule for particular due dates.

Worked example

Inventory days of 45 plus receivable days of 30 give a 75-day operating cycle. Subtracting 25 payable days gives a 50-day cash conversion cycle. At 90 payable days, the same operating assumptions produce a −15-day cycle.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

  • Inventory Turnover & Days

    Calculate turnover and implied holding days using at-cost beginning/end inventory and compatible period COGS.

  • Margin & Markup

    Use one cost and selling price to compare unit profit, margin on price and markup on cost.

  • Retail Shrink & Write-offs

    Compare recorded and counted inventory at cost. Add only separate losses and estimate their sales-equivalent at an entered contribution margin.

  • Order Contribution After Fulfillment

    Combine discounted goods and charged shipping, then deduct products, pick-and-pack, delivery and your payment-fee assumptions.

Calculation methods, testing and sources · Practical calculation guides