Free calculator
Working capital calculator
Debtor days, stock days and creditor days, turned into one cash conversion cycle and the dollars it locks up. Then see what shaving a few days off would free.
Your cash cycle
Working capital tied up
$0
- Cash conversion cycle0 days
- Locked in unpaid invoices$0
- Locked in stock$0
- Funded by your suppliers$0
- Freed by faster collection$0
- Extra needed for planned growth$0
A planning estimate based on averages, not an offer of finance.
Talk about working capital funding →Numbers say you need a hand?
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The cash conversion cycle in plain English
Picture a dollar leaving your account to buy stock or pay for materials. The cash conversion cycle is how many days pass before that dollar comes back as a paid customer invoice. It equals debtor days plus stock days, minus creditor days. A cafe that buys on 30-day terms and sells for cash can have a negative cycle, which means suppliers effectively fund the business. A wholesaler holding two months of stock and waiting 45 days for customers can have a cycle longer than three months.
How the dollars are worked out
The calculator turns each set of days into money using daily averages. Unpaid invoices are annual sales divided by 365, multiplied by debtor days. Stock is annual cost of sales divided by 365, multiplied by stock days. Supplier credit is cost of sales divided by 365, multiplied by creditor days. Working capital tied up is the first two minus the third.
The growth line multiplies today's working capital by your planned growth, because a bigger business with the same cycle needs proportionally more cash in the system. This is why fast-growing businesses so often need working capital funding even while sales are booming.
Ways to release cash without borrowing
- Invoice the day work is delivered and offer easy payment options. Read getting customers to pay faster.
- Trim slow-moving stock and reorder smaller quantities more often. See stock and inventory cash flow.
- Negotiate longer supplier terms in exchange for reliability. Our guide to negotiating supplier terms covers how.
When funding makes sense
If the cycle is as tight as it can reasonably be and growth still needs more cash, a facility sized to the extra working capital keeps the business moving without starving it. A line of credit often suits because the need rises and falls through the year. Start an enquiry with the growth figure from this calculator and a real person will take it from there, with no credit check to enquire.
Questions about this calculator
What is working capital?
It is the money a business needs to keep running day to day: cash tied up in unpaid customer invoices and stock, less what you owe suppliers who have given you time to pay. The longer your cash cycle, the more working capital the business soaks up.
What are debtor, stock and creditor days?
Debtor days is how long customers take to pay you. Stock days is how long stock sits before it is sold. Creditor days is how long you take to pay suppliers. Add the first two, subtract the third, and you have your cash conversion cycle.
Where do I get these numbers?
Your accounting software's aged receivables and aged payables reports give debtor and creditor days. Stock days can be estimated by dividing average stock on hand by your cost of sales and multiplying by 365. Service businesses with no stock can enter zero.
Why does growth make working capital worse?
Because every extra dollar of sales ties up more cash in invoices and stock before it comes back. A business growing quickly with a long cash cycle can run short of cash while its profit and loss looks excellent.
Is my data stored?
No. Everything is calculated in your browser and nothing is stored or sent.
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