Working capital
Working Capital Cash Release Simulator
Turn a target for receivable, inventory and payable days into the cash it would release, split by lever. Enter days or balances — the other side is always derived and always shown, so the two can be checked against each other.
Input data
Annual figures drive the levers. Targets move on the sliders or in the fields.
Which side are you typing?
- Daysin use
- You hold a days calculation. The balances are derived and shown beside them.
- Balances
- You hold a balance sheet. The days are derived, so the estimate ties back to real numbers.
Only the side you declare is editable. The page never shows two fields that must agree and lets you fight them.
The slider runs to twice the current value. The field accepts anything outside it.
The slider runs to twice the current value. The field accepts anything outside it.
The slider runs to twice the current value. The field accepts anything outside it.
Cash released at target
$21.48m
Reaching the target position would release $21.48m. Receivables contribute $10.00m, inventory $6.00m and payables $5.48m. The cash conversion cycle would improve by 30 days.
- Cycle now
- 75 days
- Cycle at target
- 45 days
- Improvement
- 30 days
Both sides of every lever
Derived figures are marked, so the pair you typed and the pair we calculated are never confused.
| Lever | Days now | Days target | Balance now | Balance target | Cash release |
|---|---|---|---|---|---|
| Receivables | 50 | 40 | $50.00m | $40.00m | +$10.00m |
| Inventory | 60 | 50 | $36.00m | $30.00m | +$6.00m |
| Payables | 35 | 45 | $19.18m | $24.66m | +$5.48m |
| Total | +$21.48m | ||||
Italic figures are derived from the side you entered. Every row shows both, so the estimate can be tied back to a real balance sheet.
Reuse the analysis
Copy the summary, or export the levers and the chart.
Transparent by design
How this calculation works
A cash release is a one-off: the balance sheet moves once and stays there. The financing benefit is what holding that cash saves every year afterwards. They are different quantities and are never added together.
Receivables
(Current DSO − target DSO) × annual revenue ÷ days basis.
Inventory
(Current DIO − target DIO) × annual COGS ÷ days basis.
Payables
(Target DPO − current DPO) × annual purchases ÷ days basis. Where purchases are not given, COGS stands in and the substitution is stated on screen.
Even flow
Every formula assumes revenue, COGS and purchases arrive evenly across the year. A seasonal business will find the true release differs, and the direction of that error follows its season.
Sales tax mismatch
Receivables usually include sales tax while revenue does not, and payables include it while purchases may not. Days computed from a tax-inclusive balance against a tax-exclusive flow run high.
Days and balances
The two are the same arithmetic run in opposite directions. Whichever you type, the other is derived and shown, and the same total must come out either way.
Cash conversion cycle
DSO + DIO − DPO. It is measured in days, so changing the days basis changes the cash figures but never the cycle.
Nothing is clamped
A target worse than the current position produces a negative release, described as cash absorbed. It is a real answer and is never floored at zero.