PLAIN-LANGUAGE DEFINITION
Measures how efficiently a business converts its investments in inventory and other resources into cash. Formula: DSO + DIO − DPO. A lower or negative CCC is favorable.
How to calculate it
CCC = DSO + DIO − DPO. It estimates how long cash remains tied up between paying for inputs and collecting from customers.
EXAMPLE / INTERPRETATION
With DSO 43.8 days, DIO 48.7 days, and DPO 40.6 days, CCC is approximately 51.9 days.
Where this connects to Impresa
You may encounter this concept when reviewing Cash Flow Engine. Start with the underlying inputs and check the applicable reporting period before interpreting the result.
Read the Cash Flow Engine guideA NOTE ON INTERPRETATION
NEXT DEFINITIONWorking Capital ↗Definitions here explain the concept. Accounting treatments, formulas, and industry comparisons may vary. Use your own records and qualified advice for material decisions.