The formula for the cash cycle is a financial metric used to analyze the time it takes for a company to convert its investment in inventory back into cash. It is calculated by adding the days inventory outstanding (DIO) to the days sales outstanding (DSO) and subtracting the days payable outstanding (DPO). The cash cycle formula provides insights into a business’s efficiency in managing working capital and cash flow.
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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.
