Cash Conversion Cycle Simulator
The Cash Conversion Cycle (CCC) measures how quickly a company converts investments in inventory and receivables back into cash. Adjust the sliders to see how CCC changes instantly!
How to Use: Move the sliders for Inventory Days, Receivable Days, and Payable Days. The simulator will calculate the updated CCC automatically.
What Is the Cash Conversion Cycle (CCC)?
The Cash Conversion Cycle measures how long a company takes to convert its investments in inventory and receivables into cash. A shorter CCC means stronger working capital efficiency.
CCC Formula:
CCC = Inventory Days + Receivable Days – Payable Days
Why CCC Matters
- Shows how quickly money comes back into the business
- Reveals liquidity strength
- Helps evaluate operational efficiency
- Key for retail, manufacturing, FMCG, and distribution businesses
This simulator visually demonstrates how small changes in inventory, receivables, or payables dramatically impact cash flow.
Understanding CCC in Simple Words
CCC simply tells:
👉 How many days your money gets stuck in the business before returning as cash.
A lower CCC means:
- Faster cash flow
- Better efficiency
- Stronger liquidity
A higher CCC indicates:
- Money stuck in inventory
- Slow customer payments
- Weak cash flow
CCC is one of the most important working capital metrics.
❓ Frequently Asked Questions (FAQ)
- What is a good CCC?
Depends on industry, but generally:
- Below 40 days → Excellent
- 40–90 days → Acceptable
- 90+ days → Weak
- Why is Payable Days subtracted in the formula?
Because delaying payments improves cash flow — it reduces the time money stays stuck.
- Can CCC be negative?
Yes!
A negative CCC means a company gets paid before paying suppliers — extremely efficient.
Retail giants like Amazon & Walmart often have negative CCC.
- What improves CCC?
- Faster inventory turnover
- Faster customer collections
- Slower supplier payments
- Why is CCC important for investors?
It shows whether the business has:
- Strong working capital
- Good cash flow management
- Efficient operations
- Ability to scale without cash strain
- What skills does this simulator build?
You’ll learn:
- How inventory affects cash flow
- How receivables delay cash
- How payables help liquidity
- How CCC measures business efficiency