[Verse 1]
From cash to inventory, the cycle starts to turn
Purchase raw materials, watch the money burn
Days in inventory sitting on the shelf
Waiting for the moment when products sell themselves
Accounts receivable waiting to collect
Credit terms extended, what did we expect?
[Chorus]
Cash conversion cycle, round and round it goes
DIO plus DSO minus DPO
Inventory days plus collection time
Minus payment days, optimize the line
Working capital flowing like a stream
Efficiency and liquidity, the CPA dream
[Verse 2]
Days inventory outstanding, how long do we hold?
Average inventory divided by daily goods sold
Times three sixty-five to get the days we wait
Too much tied up capital seals our fate
Faster turnover means better cash flow
Keep the inventory moving, don't let it go slow
[Chorus]
Cash conversion cycle, round and round it goes
DIO plus DSO minus DPO
Inventory days plus collection time
Minus payment days, optimize the line
Working capital flowing like a stream
Efficiency and liquidity, the CPA dream
[Verse 3]
Days sales outstanding shows collection speed
Accounts receivable divided by daily sales we need
Multiply by days to see how long we wait
For customers to pay us, don't be running late
Credit policies matter, terms that we extend
Balance sales growth with cash flow in the end
[Bridge]
Days payable outstanding is our saving grace
How long we hold supplier cash in our space
Accounts payable divided by daily purchases made
Times three sixty-five, that's how long payments stayed
Stretch it out but keep relations strong
Pay suppliers fairly, don't string them along
[Chorus]
Cash conversion cycle, round and round it goes
DIO plus DSO minus DPO
Inventory days plus collection time
Minus payment days, optimize the line
Working capital flowing like a stream
Efficiency and liquidity, the CPA dream
[Verse 4]
Negative cycle means we're playing smart
Getting paid before we pay, that's financial art
Positive cycles tie up precious cash
Optimize each component, don't be too rash
Monitor the metrics, track the daily flow
Cash conversion mastery helps the business grow
[Outro]
From cash to inventory to receivables and back
Keep the cycle flowing, stay on the right track
Working capital management, liquidity's key
Cash conversion cycle sets your business free