Operating Cycle Calculator Tool

Operating Cycle Calculator

Operating Cycle Calculator

Operating Cycle Calculator
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

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