Cash Conversion Cycle Simulation

Adjust Average Days in Inventory (ADI), Average Days in Accounts Receivable (AR), and Average Days in Accounts Payable (AP) to see how changes affect the cash conversion cycle (CCC). Then estimate cash invested in operations and its annual carrying cost.

1) CCC Components

CCC = ADI + AR - AP

Average Days in Inventory (ADI) 45

Average Days in Accounts Receivable (AR) 30

Average Days in Accounts Payable (AP) 25

Cash Conversion Cycle (days)

50.00

No change vs baseline

Baseline CCC (days)

50.00

Baseline uses initial values on page load. A +1 day change in ADI or AR increases CCC by 1 day; a +1 day change in AP decreases CCC by 1 day.

2) Cash Invested in Operations

Amount Invested = Annual Unit Sales x Variable Cost/Unit x (CCC Days / 365)
Cost of Investment = Amount Invested x Cost of Capital

Use computed CCC from Section 1

CCC Days for cash investment model

Editable when checkbox is off.

Annual Unit Sales

Variable Cost per Unit ($)

Cost of Capital (%)

Amount of Cash Invested ($)

Annual Cost of Cash Invested ($)

3) CCC Structure Graph

Top row shows ADI + AR. Bottom row shows AP + CCC on the same scale.

ADI + AR

AP + CCC