Lara GuevaraSupply Chain expert (Product and Service)

How Long Is Your Cash Actually Trapped #DTCbusiness #CashFlow #SupplyChain

9 Mar 2026 · 1 min

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1:12

In this short instructional video, Lara Guevara explains the cash conversion cycle (CCC) for direct‑to‑consumer (DTC) brands, highlighting how it represents the time between paying suppliers and receiving payment from customers. She defines the CCC formula (Days Inventory Outstanding + Days Receivables Outstanding − Days Payables Outstanding), walks through a concrete example (90 days DIO + 3 days DRO − 30 days DPO = 60 days cash trapped), and emphasizes that many DTC brands are effectively financing their own operations for two to four months. Guevara urges viewers to calculate their own CCC, locate the hidden days, and work to shrink the cycle, promising a deeper tutorial later in the week.

Chapters

How long from paying your supplier to getting paid by your customer? The number has a name and you've probably never calculated it. It's called your cash conversion cycle, and for most DTC brands, it's somewhere between 60 and 120 days. Think about that. You pay for inventory today, that cash doesn't come back for 2 to 4 months. You're essentially funding your own business with a loan that takes months to repay. The formula is DIO plus DRO minus DPO. Days Inventory Outstanding is how long your inventory sits before it sells, plus Days Receivables Outstanding, or how long until your customer actually pays you, minus Days Payables Outstanding, or how long your suppliers give you to pay them. Example: 90-day DIO plus 3-day DRO minus 30-day DPO equals 60 days trapped. 60 days where your cash is gone. Working for you in theory, untouchable in reality. This week I'm teaching you how to calculate yours. Find where the days are hiding and start shrinking it. Follow so you don't miss it.