Allianz Trade: Corporate cash conversion cycle lengthens to 67 days in 2025
Allianz Trade's latest report indicates that companies globally took an average of 67 days to convert cash spent into cash collected in 2025, primarily due to increased inventory levels.
Businesses worldwide required an average of 67 days to convert cash spent on operations into cash collected from sales in 2025, according to a new report from trade credit insurer Allianz Trade. This lengthening of the cash conversion cycle (CCC) is nearing historically high levels and is largely driven by companies prioritizing supply chain resilience through increased inventory.
The global CCC rose by half a day to 67 days in 2025, placing it three days above the 10-year average and close to the 2023 peak. The primary factor behind this trend is a strategic shift in inventory management, moving from "just-in-time" efficiency towards a "just-in-case" resilience model. Building larger inventories ties up more capital but enhances supply chain security and flexibility in response to geopolitical uncertainty and disruptions.
Days Inventory Outstanding (DIO), which measures how long inventory is held, now explains nearly 80% of the CCC. Global DIO stood at 53 days in 2025, remaining elevated compared to pre-pandemic levels. Meanwhile, Days Sales Outstanding (DSO), reflecting payment terms for customers, did not add significant pressure, remaining stable at 56.5 days.
Sectoral divergence is also notable, with some industries extending their CCC while others shorten it. For instance, automotive suppliers saw a four-day increase, while sectors like transport equipment and computer & telecom experienced a decrease. Allianz Trade anticipates a moderate increase in the global CCC for 2026, although factors such as limited capacity for further inventory growth in some sectors and ongoing digitalization investments are expected to moderate the rise.