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How Long Is Your Cash Tied Up?

With 30 days inventory, 40 days receivables, and 20 days payables, your cash is tied up for 50 days (30+40-20). On $1M of annual COGS that is about $137,000 of working cash locked in the cycle at any time.

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

CCC = DIO + DSO - DPO. DIO = average inventory / COGS x 365; DSO = receivables / revenue x 365; DPO = payables / COGS x 365. A shorter CCC means you convert spend into collected cash faster, freeing cash without new debt. This is standard working-capital management.

What Should You Do?

Scenario 1: collecting invoices 10 days sooner cuts CCC to 40 and frees ~$27k per $1M COGS. Scenario 2: negotiating 10 more days of supplier terms drops CCC to 40 too. Scenario 3: a negative CCC (payables exceed inventory+receivables) is the retailer's dream — you sell before you pay.

Frequently Asked Questions

What is a good CCC?

Lower is better, but it is sector-driven — grocery is near zero, manufacturing can be 100+ days. Improve it, don't chase a universal target.

How do I shorten it?

Faster collections, tighter inventory, and longer (fair) supplier terms. Our AR Turnover tool digs into receivables.

Why does DPO subtract?

Payables are interest-free financing — the longer you legitimately hold cash, the less you need to borrow.

Authoritative References

Investopedia — Cash Conversion Cycle — CCC formula and components.
Corporate Finance Institute — CCC — Working-capital cycle analysis.