Glossary

What is Cash Conversion Cycle (CCC)?

Last updated July 2026

Definition

The cash conversion cycle (CCC) is the number of days between paying for inventory and collecting cash from its sale. Inventory days are usually its largest component.

Also known as: CCC, cash cycle

Formula CCC = DSI + Days Sales Outstanding − Days Payable Outstanding

CCC = days inventory + days receivable − days payable. Because inventory days (DSI) is typically the biggest lever, reducing excess stock is often the fastest way to shorten the cycle.

A shorter cash conversion cycle means the business self-funds more of its growth and depends less on external capital.

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