What are the three distinct stages of cash conversion cycle?

Cash Conversion Cycle = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) – Days Payable Outstanding (DPO)

How do you calculate the Cash Conversion Cycle?

The formula for calculating the cash conversion cycle sums up the days inventory outstanding and days sales outstanding and then subtracts the days payable outstanding. Cash Conversion Cycle = Days Inventory Outstanding (DIO) + Days Sales Outstanding (DSO) – Days Payable Outstanding (DPO)

What is the purpose of the cash conversion cycle?

The cash conversion cycle (CCC) measures the amount of time required for the company to clear out its stored inventory, turn its outstanding accounts receivables (A/R) balance into cash, and how long the payment date to suppliers for goods/services received can be pushed out.