Cash-to-Cash Cycle Time
Finance
Cash-to-Cash Cycle Time
Days between paying suppliers and receiving cash from customers, often calculated as DIO + DSO - DPO.
Examples
- 01With 60 days of inventory, 45 days to collect from customers and 50 days to pay suppliers, the cash-to-cash cycle time is 55 days.
- 02The finance review shows the cash-to-cash cycle time by business unit, and the spare-parts unit stands out at 110 days.
- 03Cutting inventory by 15 days through smaller batches shortens the cash-to-cash cycle time and frees about EUR 3 million of cash.