Article · ~8 min read

Cash Conversion Cycle

Corporate Finance Institute · corporatefinanceinstitute.com Free Beginner

Explains the cash conversion cycle as days inventory outstanding plus days sales outstanding minus days payable outstanding: how long your own cash is tied up between paying for stock and collecting from customers.

  • CCC = DIO + DSO - DPO.
  • Each day you cut from the cycle frees cash without borrowing.
  • Compare your cycle with peers in the same industry.
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The question it answers

  1. What is working capital, and how do I manage it?

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