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Cash conversion cycle

Days in receivables and inventory, minus days to pay suppliers, with a worked example from Apple and the figure for every company that reports the lines.

The formulas

Days sales outstanding = accounts receivable ÷ revenue × 365
Days in inventory = inventory ÷ cost of sales × 365
Days payable = accounts payable ÷ cost of sales × 365
Cash conversion cycle = DSO + days in inventory − days payable

Receivables, inventory and payables are year-end balance sheet figures. Revenue and cost of sales are for the full year. Accounts receivable and inventory have their own pages; this page puts them together with payables. Working capital is the dollar version of a similar idea.

An example: Apple

Apple reported receivables of $43.8B, inventory of $14.5B and accounts payable of $82.3B at year end, against revenue of $478.8B and cost of sales of $245.2B. That is 33 days of sales in receivables, 22 days of inventory and 122 days to pay suppliers, a cash conversion cycle of -67 days.

Source: Apple 10-K for fiscal 2026, filed Nov 3, 2026

A negative cycle, as at Apple and 7 other companies in the table, means the company, on this measure, collects from customers and turns inventory into cash before it pays its suppliers. That is common at large retailers and hardware companies with a lot of bargaining power over suppliers. It is not automatically a sign of strength or weakness: a company can also show a short cycle by stretching payables, which suppliers may not tolerate forever.

Every company that reports all three lines

The shortest cycle in the table is Apple's, at -67 days; the longest is Eli Lilly's, at 376 days. Industries differ sharply: grocers and hardware companies tend to sit at the short end, and drug and chip makers with long production cycles at the long end.

Days sales outstanding is year-end receivables divided by the year's revenue, times 365. Days in inventory is year-end inventory divided by cost of sales, times 365. Days payable is year-end accounts payable divided by cost of sales, times 365. The cash conversion cycle is the first two minus days payable. Only companies that report all three balance-sheet lines plus cost of sales are included. Banks are left out. Using year-end balances instead of averages makes the figures approximate.

More in Learn and Tools · Methodology & Disclosures explains where every number comes from.