CashtoCash

Cashtocash is a term used in corporate finance to describe the cash-to-cash cycle, the period between cash outlay for production and cash inflow from sales. It is also referred to as the cash-to-cash conversion and is a key indicator of working capital efficiency and liquidity. The length of the cashtocash cycle is typically expressed in days and can be estimated as days inventory outstanding plus days sales outstanding minus days payable outstanding.

Calculation and components: DIO measures how long inventory sits before it is sold; DSO measures the time to collect receivables; DPO measures the time a company takes to pay its suppliers. Shortening cashtocash can improve liquidity and reduce financing costs, but may require trade-offs such as holding less inventory or straining supplier relationships. Common strategies include improving demand forecasting, just-in-time inventory, tighter receivables collections, early payment discounts, and negotiating extended payment terms with suppliers where appropriate. In capital-intensive industries the cycle is more sensitive to seasonality.

Usage and context: In treasury and supply chain finance, cashtocash is used to assess liquidity risk, optimize cash management, and compare performance across periods or units. It interacts with financing arrangements such as supplier finance programs, reverse factoring, and dynamic discounting.

Brand use: Cashtocash may appear as a brand name or product label for various financial services, apps, or platforms. No single universally recognized entity uses the term; if used as a brand, details depend on the specific company.