Business
Operating Cycle Calculator
Calculate time from purchasing inventory to collecting payment
Operating Cycle Formula
Operating Cycle = Inventory Days + Receivable Days
Cash Conversion Cycle = Operating Cycle - Payable Days
The operating cycle measures the time from purchasing inventory to collecting cash. A shorter cycle means better cash flow management.
Key Metrics
DIO (Days Inventory Outstanding)
How long inventory sits before sale
DSO (Days Sales Outstanding)
How long to collect payment after sale
DPO (Days Payable Outstanding)
How long before paying suppliers
Negative CCC (Best Case)
Get paid before paying suppliers