The cash conversion period, also known as the cash conversion cycle, measures the time it takes for a company to convert its investments in inventory and other resources into cash from sales. It is calculated by adding the days inventory outstanding (DIO), days sales outstanding (DSO), and days payable outstanding (DPO) and then subtracting the DPO. A shorter cash conversion period indicates that a company is more efficient at managing its working capital and converting assets into cash, which is crucial for maintaining healthy cash flow and liquidity.
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Autonomous O2C to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.
