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Cash Conversion Cycle Calculator

Days Sales Outstanding + Days Inventory Outstanding − Days Payable Outstanding. The single number capturing how long cash is tied up in operations.
Cash conversion cycle
39 days
DSO (Days sales outstanding)
51 days
DIO (Days inventory outstanding)
49 days
DPO (Days payable outstanding)
61 days
CCC = DSO + DIO − DPOThe number of days your cash is tied up in operations. Lower = better. SaaS often has negative CCC (customers pay upfront for annual plans). Hardware and marketplaces can have CCC of 60-120 days.
Benchmarks by business type
  • SaaS (annual prepaid)−180 to −90 days
  • SaaS (monthly)15-45 days
  • Marketplace0-30 days
  • Hardware / DTC60-120 days
  • Services / agency45-90 days

What is the cash conversion cycle calculator?

Cash Conversion Cycle (CCC) = DSO + DIO − DPO.

  • DSO (Days Sales Outstanding): how long it takes you to collect from customers after a sale.
  • DIO (Days Inventory Outstanding): how long inventory sits before being sold.
  • DPO (Days Payable Outstanding): how long you take to pay your vendors.

Lower CCC = less cash tied up in working capital = more efficient operations. Some businesses (annual-prepaid SaaS, Amazon, Apple) have negative CCC — they collect from customers before paying suppliers.

Why this matters for founders & operators

CCC is the difference between needing $1M of working capital and needing $5M to run the same revenue. For marketplaces, hardware, and services companies it's a defining metric.

For pure SaaS (especially with annual prepaid contracts), CCC is usually negative and not a primary concern. For everyone else, monitoring and improving CCC is one of the highest-ROI finance activities.

How to use this calculator

  1. 1
    Use trailing 12 months data

    Annual revenue, COGS for the trailing 12 months. Balance sheet items (AR, inventory, AP) at period end.

  2. 2
    Compare to category benchmarks

    SaaS, hardware, and marketplaces have very different CCC profiles. Compare to your specific business type.

  3. 3
    Track quarterly

    Direction matters. CCC improving from 60 to 45 over a year is a great story even at 45.

  4. 4
    Optimize each component

    DSO: faster invoicing, automated collections, deposits. DIO: tighter inventory management. DPO: negotiate longer vendor terms.

FAQ

What's a good CCC?+
Depends on the business. SaaS: negative is normal. Hardware: 60-90 is typical. Marketplaces: 0-30 is healthy. Lower than peers is always good.
Why is negative CCC valuable?+
It means customers fund your operations. The faster you grow, the more cash you generate. Companies with negative CCC can scale without needing to raise as much capital.
How do I lower DSO?+
Faster invoicing, shorter payment terms, deposits at signing, automated dunning, accept credit cards. SaaS with annual prepaid contracts has DSO near zero.
Should I include subscription revenue in DSO?+
Yes — but if customers prepay annually, you have negative DSO (you've collected before delivering the service). Captures correctly when you use balance sheet AR.