Business
Working Capital Unit Economics Calculator
Estimate accounts receivable, inventory, accounts payable, net working capital, cash-conversion cycle, and the additional funding absorbed as monthly revenue grows.
Opening monthly cost of goods sold-
Opening accounts receivable requirement-
Opening inventory requirement-
Opening accounts payable funding-
Opening net working capital-
Cash conversion cycle-
Final-month revenue-
Final-month cost of goods sold-
Final accounts receivable requirement-
Final inventory requirement-
Final accounts payable funding-
Final-month net working capital-
Additional working capital through horizon-
Opening cash after modeled NWC growth-
Cash above entered reserve after NWC growth-
Decision view
Operating cash-conversion cycle
Operating cash-conversion cycleReceivables and inventory absorb operating cash while supplier payables offset the net working-capital requirement.
Exact scenario comparisonDays sales outstanding changes while all other entered assumptions remain constant.
| Days sales outstanding | Opening monthly cost of goods sold | Opening accounts receivable requirement | Opening inventory requirement | Opening accounts payable funding | Opening net working capital | Cash conversion cycle | Final-month revenue | Final-month cost of goods sold | Final accounts receivable requirement | Final inventory requirement | Final accounts payable funding | Final-month net working capital | Additional working capital through horizon | Opening cash after modeled NWC growth | Cash above entered reserve after NWC growth |
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Period-by-period detail
Collection-day working-capital cases
How to use Working Capital Unit Economics Calculator
- Use consistent revenue and COGS periods.
- Enter operational days based on observed balances.
- Compare additional working capital with the minimum cash reserve.
Calculator guide
Understanding Working Capital Unit Economics Calculator
Working capital ties revenue and cost of goods sold to receivable, inventory, and payable days rather than treating growth as cash immediately available.
Calculation method
How the calculation works
Convert revenue and cost of goods sold into receivable, inventory and payable balances, then project the additional operating funding absorbed by revenue growth. Revenue and cost of goods sold are converted to daily bases; DSO, DIO, and DPO create operating balances, and projected revenue growth is applied across the selected horizon.
Cash cycle
Trace cash through receivables, inventory, and payables
The bridge separates operating assets from supplier financing and shows the net funding requirement at the beginning and end of the horizon.
Worked situations
Practical examples
- Fast growth can create a funding need even while profit is positive.
- Supplier terms can partly offset receivable and inventory investment.
- Seasonal inventory can exceed the annual-average DIO.
Better inputs
Useful tips
- Reconcile modeled balances with the balance sheet.
- Stress delayed collections and early inventory buys.
- Separate tax and capital expenditure cash needs.
Before relying on the result
Limitations and common mistakes
- The model assumes stable ratios and smooth growth.
- Seasonality, bad debt, purchase commitments, tax timing, deposits, factoring, and currency effects are excluded unless modeled separately.
- It is not an accounting forecast.
Reference
Key terms
- DSO
- Average days revenue remains in receivables.
- DIO
- Average days cost remains invested in inventory.
- DPO
- Average days supplier cost remains unpaid.
Important note
Calculated from the entered values using the displayed accounting method. Reconcile material decisions with source records and applicable accounting policy.
Frequently asked questions
Why can profit rise while cash falls?
Receivables and inventory may absorb cash faster than payables fund it.
Should cash be part of net working capital here?
Cash is shown separately so operating funding demand remains visible.
Can DPO be increased safely?
Only within supplier terms and relationship constraints.