The Cash Conversion Period formula calculates the time a company takes to convert its investments in inventory and accounts receivable into cash, represented by Days Sales Outstanding (DSO) plus Days Inventory Outstanding (DIO) minus Days Payable Outstanding (DPO). This metric provides insights into the efficiency of working capital management and the speed of cash flow generation. A shorter period indicates more effective conversion and improved 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.
