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The Madison Avenue Field GuideA field guide to marketing & advertising, by Brandon Mina

GlossaryMarketing FinanceCash Conversion Cycle

Marketing Finance

Cash Conversion Cycle

The days between paying for inventory and collecting cash from customers, showing how long cash is tied up in operations.

By Brandon MinaCEO, BrandPilot AIUpdated November 2026

Short answer

The cash conversion cycle is the number of days between paying for inventory and collecting cash from customers, showing how long cash is tied up in operations. It combines days inventory outstanding and days sales outstanding, minus days payables outstanding. A shorter cycle frees cash for growth, which matters especially for inventory-heavy ecommerce brands.