Canonical formula calculator
CASH CONVERSION CYCLE
How many days from spending a dollar to having it back in cash — the working capital test most operators have never run.
Worked example
How the number is worked out
A kitchen supplier who buys stock, sells on credit, and pays their own suppliers late.
Starting from
Working
Forty-seven days between money leaving for stock and money arriving from the sale. That gap has to be funded out of something, every single cycle, and it grows with the business rather than shrinking.
What this tells you
Cash Conversion Cycle measures how many days it takes for cash to flow back to you after you spend it. It combines three numbers: how long until customers pay you (DSO), how long inventory sits before selling (DIO), and how long you take to pay suppliers (DPO). A lower CCC is better. A negative CCC is exceptional — it means customers pay you before you pay your suppliers, which is how Amazon and similar businesses self-finance growth.
When to use it
Calculate CCC quarterly for inventory businesses, and any time you change payment terms with customers or suppliers. Watch the trend — CCC creeping up means working capital is tightening. Use it as a diagnostic when cash feels tight even though revenue is growing.
What it doesn’t tell you
CCC is an average. Some customers pay on time, some pay 90 days late, and that variance matters for cash planning. CCC also does not account for the total dollar amounts — a 30-day CCC on $10M in revenue is a very different cash impact than a 30-day CCC on $100K. Pair CCC with working capital trends for the full picture.
Reckon it, don’t just calc it
A calculator gives you today’s number. Reckon takes your plan to make your own money and checks it against what’s real — your margin, your price, what it takes to hit the take-home you want. No AI, no guessing — the same input always gives the same answer.