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Cash Conversion Cyclenoun · abbr.

How many days cash is tied up between paying suppliers and collecting from customers.

The cash conversion cycle combines inventory days and receivable days, then subtracts payable days. The result is the number of days your own cash funds the operating cycle.

A negative cycle means suppliers fund your growth — the position strong retailers occupy. A long positive cycle means growth consumes cash, and every extra sale makes the squeeze worse.

How it is calculated

CCC = DIO + DSO − DPO

Reduce inventory days, collect sooner, or negotiate longer terms.

Also called

  • cash cycle

See it in AWRA OpsHub

Accounting Insights

Related terms

Working Capital

The short-term capital tied up in running the business day to day.

Days Inventory Outstanding

DIO

The average number of days stock is held before it is sold.

Days Sales Outstanding

DSO

The average number of days it takes to collect payment after a sale.

Days Payable Outstanding

DPO

The average number of days you take to pay suppliers.

More in Accounting

Accounts Payable (AP) Accounts Receivable (AR) Accrual Accounting Accrued Expense Aging Report Bad Debt Provision Balance Sheet Bank Reconciliation

Cash Conversion Cycle is not just a definition here

Accounting runs on this vocabulary every day in AWRA OpsHub — 51 of our 259 glossary terms describe things the platform actually does.

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