METHOD & GUIDANCE
How this calculation works
Enter figures from the same period and on a consistent sales tax-inclusive or sales tax-exclusive basis. Tool IQ recalculates every output immediately; nothing you enter is saved or sent to us.
How to use the result
Track the component days as well as the total cycle; improving inventory or collections may be safer than simply delaying supplier payments.
Worked example
The calculator converts average inventory, receivables and payables to days using the matching annual revenue and cost bases, then combines them.
Common mistakes
- Using revenue for inventory or payables days instead of COGS.
- Mixing point-in-time balances with mismatched periods.
- Assuming a negative cycle is automatically sustainable.
Frequently asked questions
Is this calculator free?
Yes. It requires no account and stores no calculation inputs.
Can I use the answer for a formal filing?
No. It is a planning estimate, not accounting, tax, legal or investment advice. Confirm material decisions with a qualified professional.
Should I include sales tax?
Use a consistent basis throughout. Businesses that recover input tax commonly model net figures; consumer-facing prices are often considered gross.
Continue the decision
- Days Sales Outstanding Calculator — See how long customer invoices take to become cash.
- Inventory Turnover Calculator — Measure how quickly stock turns into sales.
Method reviewed 26 July 2026. Figures are illustrative and calculated locally in your browser.