Calculation: CCC = DIO + DSO - DPO
Example: The Round Number CompanyThe values are calculated for each term under their individual listings. DIO = Days Inventory Outstanding = 227 Days DSO = Days Sales Outstanding (DSO)= 73 Days DPO = Days Payable Outstanding = 91 Days Cash Conversion Cycle = 227 + 73 - 91 = 209 Days |
This metric takes into account how much time the company needs to sell its Inventory, how much time it takes to collect Receivables, and how much time it has to pay its bills (Payables). A lower number is preferred.
term list.