Learn / Fundamentals / Cash flow / Cash Conversion Cycle
CCC = DIO + DSO − DPO
The cash conversion cycle counts how many days cash is tied up from buying inventory to collecting from customers, minus how long the company waits to pay suppliers. Shorter usually means cash comes home faster. Negative can mean suppliers fund the loop.
01 Feel it first
Slide inventory days, collection days, and payables days. Watch the cash conversion cycle recompute live.
02 Break the intuition
A 90-day cycle looks painful. Reveal when a long loop is normal, or when negative CCC is a feature.
03 Race it
Hit Race. See how many fewer days cash sits in the operating loop for a fast retailer.
Hit Race to compare the lanes side by side.
04 Scrub the scale
Drag the cycle length. Negative means suppliers help fund the loop. Very long means cash waits in the operating machine.
AMC Inc at 50 days sits in the normal band. A grocer near −10 days and a capital-heavy builder near 90 days can both be normal for their models. Read the three components, not just the total.
05 Three links
Each leg of the formula tells a different story. Toggle to see what each day pile measures.
06 The catch
Supermarkets can run negative. Manufacturers run long. Software often runs short on inventory.
07 Check yourself
08 Where it breaks
Stretching supplier payments shortens CCC on paper. If vendors tighten terms or walk away, the benefit reverses fast.
A big contract billed late or early can spike receivable days. Smooth with trailing averages when you can.
Collecting before you pay suppliers helps cash, but it depends on supplier trust and tight inventory control.
A jet builder and a grocer should not share one CCC target. Compare inside the same kind of business.
Open any ticker for working-capital context, then track how fast cash moves through the operating loop.
Default matches AMC Inc: 45 + 30 − 25 = 50 days of cash tied up. Shrink inventory or collection days, or stretch payables, and the cycle shortens. Negative means suppliers are funding the loop.