|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash Conversion Cycle |
|
| https://www.dwmbeancounter.com |
|
|
|
| Input Cells are colored |
|
|
|
|
| Enter Period |
|
Enter Days |
|
| |
|
|
| 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ending
Inventory |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of Goods
Sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning
Account Receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ending Account
Receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Credit
Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning
Account Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Ending Account
Payable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
| DSO |
|
0 |
0 |
0 |
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 |
|
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash
Conversion Cycle (CCC) |
|
0 |
0 |
0 |
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. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
