DSO, DPO & Cash Conversion Cycle Calculator
The cash conversion cycle measures how many days pass between paying for something and getting paid for it. It is made of three parts — how long stock sits (DIO), how long customers take to pay (DSO), and how long you take to pay suppliers (DPO) — and the calculator works out all four numbers from six inputs.
The formula is DIO plus DSO minus DPO. A cycle of 45 days means that for 45 days your own cash is funding the gap. Grow revenue by half and, unless the cycle shortens, the amount of cash trapped in it grows by half too. This is the mechanism behind the most common way a profitable business fails: the orders are real, the margin is real, and there is still no money in the account.
Use average balances rather than closing ones. A closing receivables figure taken the day after a big customer paid makes the cycle look far shorter than it is. The sheet asks for averages — opening plus closing, divided by two — for exactly that reason, and notes it where you enter them.
The what-if section prices each lever separately, because they are not measured on the same base. Collecting faster is worth a day of revenue; holding less stock or paying later is worth a day of cost of goods sold. Enter the days you think you could realistically move and the sheet returns the cash released and the new cycle length. A second tab tracks twelve months of the same four metrics, which matters more than any single reading — a cycle creeping up three months running is cash draining out while revenue still looks fine.
Recomputing this by hand each month is the part that usually stops. Finmap derives DSO, DPO and the cycle from your live receivables and payables, so the trend keeps updating whether or not anyone opens the file.
