Cash Conversion Cycle
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Input Cells are colored  
Enter Period 365  
   
Days - 30, 90, 180, or 365
 
30 Days= 12 Periods
90 Days= 4 Periods
180 Days= 2 Periods
365 Days= 1 Period
Financial Information Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12
Beginning Inventory   90,000 120,000 100,000                  
Ending Inventory   110,000 100,000 140,000                  
Cost of Goods Sold   600,000 700,000 900,000                  
Beginning Account Receivable   85,000 75,000 125,000                  
Ending Account Receivable   75,000 115,000 95,000                  
Net Credit Sales   1,000,000 1,200,000 1,500,000                  
Beginning Account Payable   45,000 55,000 65,000                  
Ending Account Payable   55,000 65,000 85,000                  
Net Credit Purchases                          
                           
Cash Convesion Cycle Calculations   Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 Period 11 Period 12
DIO   61 57 49 0 0 0 0 0 0 0 0 0
DSO   29 29 27 0 0 0 0 0 0 0 0 0
DPO-Preferred Calculation   0 0 0 0 0 0 0 0 0 0 0 0
DPO-Alternate Calculation   30 31 30 0 0 0 0 0 0 0 0 0
                           
Cash Conversion Cycle (CCC)   60 55 46 0 0 0 0 0 0 0 0 0
DIO (Days Inventory Outstanding) is calculated using the formula given below
DIO = (Average Inventory / Cost of Goods Sold) * No of Days
A lower DIO suggests that a company is efficiently managing its inventory and converting it into sales quickly. 
DSO (Days Sales Outstanding)  is calculated using the formula given below
DSO = (Average Account Receivable / Total Credit Sales) * No of Days
A lower DSO indicates that the company collects cash from customers more quickly, improving cash flow. 
DPO (Days Payable Outstanding) is calculated using the formula given below
DPO = (Average Account Payable /Net Credit Purchases) * No of Days
If the total  Net Credit Purchase Amount is not available, Cost Of Goods Sold 
is often used as a substitute although Net Credit Purchases is preferred for accuracy
 A higher DPO can be beneficial as it allows the company to retain cash longer before settling its obligations. 
Cash Conversion Cycle (CCC) is calculated using the formula given below
Cash Conversion Cycle (CCC)  = DIO + DSO - DPO
A shorter cash conversion cycle indicates that a company can quickly convert 
its investments back into cash, which is generally seen as a sign of good financial health and operational efficiency.
Conversely, a longer cash conversion cycle may suggest inefficiencies in inventory management
or collections processes, potentially leading to liquidity issues.