Cash conversion cycle calculator
Cash conversion cycle = days your money sits in inventory + days waiting for marketplace payout − days your supplier gives you to pay. For an inventory-led cross-border seller this is the number that decides how much growth you can fund: a 75-day cycle at $300/day of cost means ~$22,500 permanently tied up — and doubling sales doubles it. Enter your numbers below.
Your cash conversion cycle is ≈44 days — roughly $13,200 tied up at your current cost run-rate.
- Days inventory outstanding (inventory ÷ daily COGS) Calculation60 days
- Days sales outstanding (payout delay) Calculation14 days
- Days payables outstanding (supplier terms) Calculation-30 days
Assumption: DSO for marketplace sellers is the payout delay (order → funds in your bank), not invoice terms.
- Sea freight and overseas warehouses push DIO up weeks at a time; model channel changes before making them.
- Supplier terms (DPO) are the cheapest lever: 30 extra days of payables finances 30 days of inventory for free.
The three levers, ranked by cheapness
Supplier terms are the cheapest lever: moving from prepayment to net-30 finances a month of inventory for free, and factories grant terms to repeat buyers far more readily than sellers assume. Payout delay is second — marketplace reserve policies and settlement schedules differ by weeks. Inventory days are the most expensive lever, because cutting them usually means air freight or smaller, more frequent orders at worse unit prices.
Watch the interaction with the reorder-point calculator: every day of safety stock you add is a day of inventory in this cycle. Resilience and cash efficiency pull in opposite directions; the point of running both numbers is to choose the trade-off on purpose.
Common questions
- What counts as 'payout delay' for marketplace sellers?
- Days from customer order to funds available in your bank — settlement schedule plus any rolling reserve. It replaces the invoice-based DSO of classic finance.