Cash conversion cycle (CCC)
How many days pass between paying for inventory and collecting the cash from selling it.
A short or negative cycle means growth funds itself; a long one means growth consumes cash.
How it is computed here
Days sales outstanding + days inventory outstanding - days payables outstanding
Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it. Filed under health. Lower is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Negative is good and common in retail and subscriptions, where customers pay first.
- Built from three year-end snapshots, so a seasonal business is badly served by it.
- Withheld rather than shown as zero when any of the three components is missing.
Not meaningful for banks, insurers, REITs: the product prints n/m with the reason rather than a number for them.
Questions
How is cash conversion cycle calculated?
Days sales outstanding + days inventory outstanding - days payables outstanding. Combines more than one basis. See the note. The pipeline prefers the data vendor's published trailing-twelve-month ratio when one exists, and falls back to recomputing from the latest filed fiscal year when it does not. Those two are different measurements: the vendor figure puts twelve months of flow over the most recent quarterly balance sheet. The source trail on each figure names which path produced it.
What does cash conversion cycle tell a value investor?
A short or negative cycle means growth funds itself; a long one means growth consumes cash.
When does cash conversion cycle mislead?
Negative is good and common in retail and subscriptions, where customers pay first. Built from three year-end snapshots, so a seasonal business is badly served by it. Withheld rather than shown as zero when any of the three components is missing.