Inventory Cash Cycle
Calculator
Results
- Cash conversion cycle (days)
- 65 d
- Ending working capital
- $428,241.24
- Additional cash needed
- $211,254.94
- Doubling month
- Not reached within the projection
Projected path over the horizon
- Working capital
- Sales
Period-by-period projection
| 1 | 120,000.00 | 130,191.78 | 157,808.22 | 71,013.70 | 216,986.30 |
| 2 | 123,600.00 | 134,097.53 | 162,542.47 | 73,144.11 | 223,495.89 |
| 3 | 127,308.00 | 138,120.46 | 167,418.74 | 75,338.43 | 230,200.77 |
| 4 | 131,127.24 | 142,264.07 | 172,441.30 | 77,598.59 | 237,106.79 |
| 5 | 135,061.06 | 146,532.00 | 177,614.54 | 79,926.54 | 244,219.99 |
| 6 | 139,112.89 | 150,927.96 | 182,942.98 | 82,324.34 | 251,546.59 |
| 7 | 143,286.28 | 155,455.79 | 188,431.27 | 84,794.07 | 259,092.99 |
| 8 | 147,584.86 | 160,119.47 | 194,084.20 | 87,337.89 | 266,865.78 |
| 9 | 152,012.41 | 164,923.05 | 199,906.73 | 89,958.03 | 274,871.75 |
| 10 | 156,572.78 | 169,870.74 | 205,903.93 | 92,656.77 | 283,117.91 |
| 11 | 161,269.97 | 174,966.87 | 212,081.05 | 95,436.47 | 291,611.44 |
| 12 | 166,108.06 | 180,215.87 | 218,443.48 | 98,299.57 | 300,359.79 |
| 13 | 171,091.31 | 185,622.35 | 224,996.79 | 101,248.55 | 309,370.58 |
| 14 | 176,224.05 | 191,191.02 | 231,746.69 | 104,286.01 | 318,651.70 |
| 15 | 181,510.77 | 196,926.75 | 238,699.09 | 107,414.59 | 328,211.25 |
| 16 | 186,956.09 | 202,834.55 | 245,860.06 | 110,637.03 | 338,057.59 |
| 17 | 192,564.77 | 208,919.59 | 253,235.87 | 113,956.14 | 348,199.32 |
| 18 | 198,341.72 | 215,187.18 | 260,832.94 | 117,374.82 | 358,645.29 |
| 19 | 204,291.97 | 221,642.79 | 268,657.93 | 120,896.07 | 369,404.65 |
| 20 | 210,420.73 | 228,292.08 | 276,717.67 | 124,522.95 | 380,486.79 |
| 21 | 216,733.35 | 235,140.84 | 285,019.20 | 128,258.64 | 391,901.40 |
| 22 | 223,235.35 | 242,195.06 | 293,569.77 | 132,106.40 | 403,658.44 |
| 23 | 229,932.41 | 249,460.92 | 302,376.87 | 136,069.59 | 415,768.19 |
| 24 | 236,830.38 | 256,944.74 | 311,448.17 | 140,151.68 | 428,241.24 |
Comparison
| Scenario | Ending working capital | Cash conversion cycle (days) |
|---|---|---|
| Doing nothing | 216,986.30 | 65.00 |
| Your scenario | 428,241.24 | 65.00 |
Formula
CCC = DIO + DSO − DPO; WC = COGS/day·DIO + sales/day·DSO − COGS/day·DPO= 65.00
Note
Simplified model: this is the exact arithmetic of the stated recurrence applied to your inputs, with every rate held constant for the whole horizon. Real businesses see growth, churn, seasonality and costs move, and no projection accounts for competition, financing terms, tax or one-off events. Treat the crossing month as an order of magnitude, not a date, and check it against your own books before committing money.
More in Business projections
See all →Frequently asked questions
What is the cash conversion cycle actually measuring?+
It measures how many days your cash is tied up between paying a supplier and collecting from a customer: days inventory sits on the shelf, plus days it takes customers to pay you, minus days your supplier lets you delay payment. A shorter number means cash comes back faster; a longer one means you need more working capital to keep operating.
Why can a profitable business still run out of cash because of this cycle?+
Profit is recorded when a sale happens, but cash isn't in hand until the customer actually pays, and by then you may have already paid the supplier and reordered stock. A business growing fast with a 60-day cycle can be profitable on paper while its bank account keeps shrinking, because every new sale consumes more cash before it returns any.
How do payment terms with suppliers change the result?+
Every extra day of supplier credit (net 30 versus net 60) directly shortens your cash conversion cycle day for day, because it delays when your own cash goes out. Negotiating longer terms is often cheaper than a loan, since it reduces the working capital you need without any interest cost.
What does a negative cash cycle mean, and is it good?+
A negative cycle means you collect from customers before you have to pay your suppliers, which is common in cash-heavy retail or subscription businesses. It's generally excellent for cash flow since growth funds itself, but it can mask thin margins, so pair it with a profitability check rather than treating it alone as a sign of health.
How should I use days inventory outstanding if I carry several very different products?+
A single blended number can hide the truth if some SKUs sell in a week and others sit for months. Run the calculator separately for your fast-moving and slow-moving categories, since a slow category can drag your average up and consume cash without showing clearly in one combined figure.