Cash conversion cycle calculator

What this calculator does

The cash conversion cycle (CCC) measures how long, in days, cash is tied up in your business between paying for stock and collecting payment from customers. It is one of the clearest gauges of how hard your working capital is working: the shorter the cycle, the sooner each pound comes back to be used again.

This tool takes three numbers — your debtor days, inventory days and creditor days — and returns your CCC in days, plus an estimate of the cash tied up in the cycle based on your turnover. It is built for UK limited companies wanting a quick read on liquidity before they commit to a bigger order, a new hire, or a funding application.

How to use it

You can read each figure from your accounts or work it out from the calculators linked below:

1. Debtor days — the average number of days customers take to pay you. Use the debtor days calculator if you don't know it.
2. Inventory days — how long stock sits before it is sold. Service businesses with no stock can enter 0.
3. Creditor days — how long you take to pay your suppliers. The longer your terms, the more this offsets the cycle.
4. Annual turnover — used only to translate the cycle from days into a pounds estimate.

Run it each quarter to track the trend. A cycle creeping longer is an early warning that cash is tightening, well before the bank balance shows it.

How to read the result

The headline is your cash conversion cycle in days. A lower number means cash returns to you faster; a higher number means more of it is locked up in stock and unpaid invoices at any moment. A negative CCC is the enviable position some retailers and subscription businesses enjoy — they are paid before suppliers fall due, so the cycle funds itself.

The second figure, cash tied up, turns those days into money by spreading your turnover across the cycle. It is the rough amount of working capital your trading pattern absorbs. Shave days off the cycle — collect faster, hold less stock, or negotiate longer supplier terms — and that sum falls, releasing cash without borrowing a penny.

The formula in plain English

The cycle is one subtraction:

CCC = debtor days + inventory days − creditor days

You add the time your money is stuck in stock and in unpaid invoices, then subtract the free credit your suppliers give you. The pounds estimate then scales it:

Cash tied up = (annual turnover ÷ 365) × CCC days

So a 50-day cycle on £600,000 turnover ties up roughly £82,000 — the working capital your trading rhythm quietly demands. Cut the cycle to 35 days and that drops to about £58,000, freeing some £24,000 of cash. The figures are illustrative, but the lever is real.

Worked example

A wholesaler collects from customers in 45 days, holds stock for 60 days, and pays its own suppliers in 30 days. Its annual turnover is £600,000.

CCC = 45 + 60 − 30 = 75 days. At £600,000 turnover, daily trade is about £1,644, so the cash tied up in the cycle is roughly 75 × £1,644 = £123,000. That is the working capital the business must find simply to keep trading at this pace. If it tightened collections to 30 days and trimmed stock to 45 days, the cycle would fall to 45 days and the cash tied up to about £74,000 — close to £49,000 released. Figures are illustrative.

Limitations and what to do next

The cycle is an average across the year, so it smooths over seasonal peaks when stock and debtors balloon. It also assumes even trading; a business with lumpy orders may tie up far more cash at certain moments than the headline suggests. Read it alongside a forward view rather than in isolation.

Where the cycle is long but the business is sound, the fix is usually faster collections, leaner stock or longer supplier terms — not a permanent loan against a temporary gap. A revolving Credicorp Flex facility is designed to bridge exactly this kind of swing. Pair this with the working capital calculator and the debtor days calculator. This is general information, not financial advice.