Look beyond turnover to the timing of cash.
IN THIS PERSPECTIVE
Profitable growth can absorb cash
A business can record sales while waiting weeks to collect payment. At the same time, it may need to pay suppliers, staff and operating costs. Working capital planning makes that timing difference visible.
Three operating measures
- Inventory days: how long goods or inputs remain in the cycle.
- Receivable days: how long customers typically take to pay.
- Payable days: how long the business takes to pay suppliers.
A simplified cash cycle adds inventory days to receivable days and subtracts payable days. It is a starting point, not a complete cash-flow model.
Use the estimate with care
Our calculator applies an operating-cost-per-day approach. It excludes taxes, reserves, uneven trading and lender margins. Compare it with monthly forecasts and actual ageing reports.
Useful questions
- Are receipts concentrated in a few customers?
- Does inventory build before a seasonal peak?
- Are delayed collections temporary or recurring?
- Would longer collection periods pressure existing limits?
Make the funding conversation relevant
Separate recurring operating needs from one-off events and capital investment. Any lender facility depends on assessment and agreed terms.
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A CLEARER NEXT STEP
Put the context into a conversation.
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