Operating Cycle Calculator
Operating Cycle Calculator | ||
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Parameter | Description | Example Value |
Days Inventory Outstanding (DIO) | The average number of days inventory is held before it is sold. | 50 days |
Days Sales Outstanding (DSO) | The average number of days it takes to collect payment after a sale. | 30 days |
Days Payable Outstanding (DPO) | The average number of days it takes to pay suppliers. | 40 days |
Operating Cycle | The total number of days it takes to turn inventory into cash. Formula: DIO + DSO – DPO |
40 days |