Calculate the Cash Conversion Cycle, which measures the amount of time it takes for a company to convert its investments in inventory and accounts receivable into cash, while considering the time it takes to pay its accounts payable. This ratio is also known as Cash-to-Cash Cycle (C2C) or Net Operating Cycle.

The Cash Conversion Cycle (CCC) is an important measure of a company’s liquidity management and efficiency in managing its working capital. It takes into account the time it takes to sell inventory, collect payments from customers, and pay suppliers. A shorter CCC indicates that a company is able to quickly convert its investments into cash, which can be a positive sign of efficient operations.

The formula is as follows:

\[\text{Cash Conversion Cycle} = \text{Days of Sales in Inventory} + \text{Days of Sales Outstanding} - \text{Days of Accounts Payable Outstanding}\]

Also known as: CCC.

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Calculate the Cash Conversion Cycle in Python

The Cash Conversion Cycle is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_cash_conversion_cycle as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

ccc_values = toolkit.ratios.get_cash_conversion_cycle()

Which returns:

  2021 2022 2023 2024 2025
AAPL -52.8985 -62.435 -70.9225 -72.9716 -71.8218
TSLA -15.3351 -9.2271 4.7523 11.9367 13.9381

Parameters

get_cash_conversion_cycle accepts the following parameters:

  • days (int, optional): The number of days to use for the calculation. Defaults to 365.
  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Inventory Turnover Ratio Days of Inventory Outstanding Days of Sales Outstanding Operating Cycle Accounts Payables Turnover Ratio Days of Accounts Payable Outstanding Cash Conversion Efficiency Receivables Turnover SGA to Revenue Ratio Fixed Asset Turnover Operating Ratio Research and Development Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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