Cash-to-cash cycle
The number of days between paying suppliers and being paid by customers.
Days inventory outstanding (DIO) = Average inventory ÷ COGS × 365
Days sales outstanding (DSO) = Accounts receivable ÷ Revenue × 365
Days payable outstanding (DPO) = Accounts payable ÷ COGS × 365
Cash-to-cash = DIO + DSO − DPO
Every day in this cycle is a day your own money is tied up in the supply chain. Cut it by ten days in a business with 4.8 million of annual cost of goods and you release about 130,000 in cash without selling anything extra.
The three parts belong to three departments: inventory to operations, receivables to sales and credit control, payables to purchasing. The metric is useful precisely because it makes them look at one number together.
Calculator
The fields start with a worked example. Replace them with your own figures; the results update as you type.
- Days inventory outstanding
- 60.8 days
- Days sales outstanding
- 48.2 days
- Days payable outstanding
- 45.6 days
- Cash-to-cash cycle
- 63.4 days
How to read it
A negative cycle is possible and is not an error: it means customers pay before suppliers are due, as in much of grocery retail and online marketplaces.
Common mistakes
- Stretching supplier payments shortens the cycle on paper and can raise your purchase prices or break a small supplier.
- Use COGS for inventory and payables and revenue for receivables. Mixing the bases gives a figure nobody can reconcile.
- Quarter-end balances are often dressed up. Monthly averages show the cycle you really operate with.
Last reviewed 30 July 2026.