How to calculate Cash Conversion Cycle
The cash conversion cycle is the number of days it takes to turn money spent on inventory back into cash from sales.
Formula
CCC = days inventory outstanding + days sales outstanding − days payable outstandingSQL query
This example assumes: figures from your inventory days, DSO and DPO queries. It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.
SELECT dio + dso - dpo AS cash_conversion_cycle_days
FROM (SELECT 62.0 AS dio, 41.0 AS dso, 35.0 AS dpo) AS inputs; -- replace with your own resultsCommon mistakes that make Cash Conversion Cycle wrong
- All three inputs must use the same period and the same method.
- A negative cycle is possible (you are paid before you pay suppliers) and is not an error.
- Services companies often have no inventory days; the formula then reduces to DSO − DPO.
Ask for Cash Conversion Cycle in plain English
Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.
- What is our cash conversion cycle this quarter versus last?
- Which of the three components changed the most?