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Miraç Özdemir
Financial Ratio Analysis

Turnover Ratios and Cash Conversion Cycle Calculator (Inventory, Receivables, Payables)

Calculates inventory, receivables and payables turnover and their day counts (DIO, DSO, DPO) plus the cash conversion cycle to show how fast working capital turns.

Version 1

Things to keep in mind:

  • Using period-end balances instead of averages distorts results for seasonal businesses.
  • Include trade receivables and payables only; exclude shareholder receivables, tax payables and similar items.
  • Keep VAT treatment consistent between receivables and revenue, otherwise day counts are off.
  • Compare with industry averages; the tool suggests no thresholds.

Calculator

Period data

TRY

Net sales for the period (TRY).

TRY

Cost of goods sold for the period (TRY).

TRY

Optional: purchases used for payables turnover (TRY). Leave 0 to use COGS.

Days in period (optional)

365 or 360 for annual data; annualise quarterly amounts first.

Working capital items

TRY

Average of opening and closing inventory (TRY). 0 if none.

TRY

Customer receivables including notes receivable (TRY). 0 if none.

TRY

Supplier payables including notes payable (TRY). 0 if none.

After the first calculation, the result updates automatically when you change a value.

Result

Enter the values and press Calculate to see the result here.

About this tool

Turnover ratios show how many times inventory, receivables and payables are renewed over a period; the day counts show how long each takes on average. Together they give the cash conversion cycle, which shows how fast working capital turns.

Formulas

  • Inventory turnover = COGS / Average inventory; DIO = Average inventory × Days / COGS
  • Receivables turnover = Net revenue / Average receivables; DSO = Average receivables × Days / Net revenue
  • Payables turnover = Purchases / Average payables (COGS if no purchases entered); DPO = Average payables × Days / Purchases (COGS if none)
  • Operating cycle = DIO + DSO
  • Cash conversion cycle = DIO + DSO − DPO

The day count is 365 or 360. Turnover ratios are rounded to 2 decimals and day counts to 1 decimal, half up (HALF_UP); cycles are added from unrounded values. If a balance is 0, its turnover is shown as 0.

Example 1: revenue 3,650,000, COGS 2,190,000, average inventory 300,000, receivables 500,000 and payables 240,000 over 365 days give DIO = 300,000 × 365 / 2,190,000 = 50.0, DSO = 500,000 × 365 / 3,650,000 = 50.0, DPO = 240,000 × 365 / 2,190,000 = 40.0; operating cycle 100.0 and cash conversion cycle 60.0 days. Inventory turnover is 7.30, receivables turnover 7.30 and payables turnover 9.13.

Example 2 (with purchases, 360 days): revenue 1,200,000, COGS 900,000, inventory 150,000, receivables 200,000, payables 250,000 and purchases 1,000,000 give DIO 60.0, DSO 60.0, DPO 90.0 days and a cash conversion cycle of 30.0 days.

How to read the result: A higher turnover means the item is renewed more often; short DIO and DSO mean less cash is tied up in stock and receivables. A long DPO means suppliers' credit is used for longer. A short cash conversion cycle means the business ties up its cash for less time; a negative one means payments to suppliers take longer than the stock and receivable periods (supplier-financed). Suitable levels vary by industry; compare the result with your own earlier periods and industry averages. To see other ratios too, look at the Financial Health Analysis tool.

How to use

  1. Enter period revenue and cost of goods sold, and choose 365 or 360 days.
  2. Enter average inventory, receivables and payables (leave unused items at 0).
  3. Optionally enter period purchases for the payables turnover.
  4. Press Calculate.

Notes

Turnover ratios are rounded HALF_UP to 2 decimals and day counts to 1 decimal. A turnover is shown as 0 when its balance is 0 (not computable). Cycles are added from unrounded values.

Sources

Frequently asked questions

5 questions

  1. Cost of goods sold divided by average inventory. COGS of 2,190,000 and average inventory of 300,000 give 7.30 turns, so stock is renewed about 7.3 times a year. Days inventory outstanding over 365 days is 50.0.

Next step

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