Days between paying suppliers and collecting from customers.
DIO + DSO − DPO. A positive cycle means you finance the gap; a negative one means suppliers finance you — the quiet superpower behind businesses like Amazon.
Example: 55 + 45 − 38 = 62 days of cash tied up per cycle.
FAQ
What is Cash Conversion Cycle in simple terms?
DIO + DSO − DPO. A positive cycle means you finance the gap; a negative one means suppliers finance you — the quiet superpower behind businesses like Amazon.