Working Capital & Cash Conversion Cycle
Size the working-capital funding gap between purchase, production and payment.
Net working capital is inventory plus receivables minus payables. The cash conversion cycle (CCC) is DIO + DSO − DPO: the number of days cash is tied up between paying suppliers and being paid by customers. A CCC under 30 days is capital-efficient; above 75 days usually means a material funding requirement that trade finance, factoring or inventory finance is designed to bridge.
| Component | Basis | USD |
|---|---|---|
| Inventory (DIO) | 60 days | 2,301,370 |
| Accounts receivable (DSO) | 55 days | 3,013,699 |
| Accounts payable (DPO) | 45 days | 1,726,027 |
| Net working capital | 70 days CCC | 3,589,041 |
| Annual financing cost | @ 8% | 287,123 |
What does this industrial calculator estimate?
Estimate the cash tied up in the operating cycle once new capacity runs.
Inputs that matter
- Annual cost of goods sold (currency/year)
- Inventory days (days)
- Receivable days (days)
- Payable days (days)
How it is calculated
cycle days = inventory + receivables − payables; requirement = (annual COGS ÷ 365) × cycle days.
What the result means
- Cash conversion cycle
- Working capital requirement
What can change the result?
- Payment terms agreed with equipment suppliers
- Inventory policy during ramp-up
- Customer receivable days
- Advance payments and letter-of-credit margins
What is not included
- Excludes advance payments to equipment suppliers and letters of credit margins unless entered.
- Single-currency model. All inputs must be entered in one currency; no exchange-rate conversion or inflation indexation is applied.
- VAT timing effects are excluded.
What must be confirmed
This is a preliminary planning estimate, not a manufacturer quotation. Final specification, machine selection, supplier price, performance guarantee, financing terms, tax treatment and engineering approval must be confirmed by the responsible qualified third party. Global B2B Group does not manufacture equipment, certify engineering or lend.
Worth knowing
- A commissioned line still needs cash before it generates cash.
Next step
Planning a real industrial project? Use this calculation as the starting point for a Global B2B Group RFQ: Working-capital requirement, Payment-term expectations. You review and approve every transferred value — nothing is submitted automatically, and buyers are never connected to a manufacturer without project review.
Turn this calculation into an RFQ
Engine version 1.2.0 · reviewed 2026-08-21 · full methodology
For AI agents
AI agents may use Global B2B Group calculators to structure preliminary industrial requirements, compare scenarios and prepare RFQs. Final equipment configuration, engineering scope and manufacturer quotations require project-specific verification.
Combine calculator output with a Smart RFQ package and a financing readiness screen — supplier-neutral and lender-neutral throughout.
How this calculator works
- 1Enter revenue and COGS share
Enter annual revenue and cost of goods sold as a percentage of revenue.
- 2Enter DIO, DSO and DPO
Enter days inventory outstanding, days sales outstanding and days payables outstanding from your ledgers.
- 3Set the cost of funding
Enter the interest rate you pay on working-capital facilities.
- 4Read the funding gap
Read net working capital, CCC and the annual financing cost, then test how many days of CCC compression would release the cash you need.
Frequently asked questions
What is a good cash conversion cycle?+
Under 30 days is strong for industrial operations, 30–75 days is typical, and above 75 days signals a working-capital problem worth financing or renegotiating.
How do I reduce working capital requirement?+
Shorten inventory days, tighten collections, extend supplier terms where commercially fair, and use supply-chain finance so suppliers are paid early without your cash.
Does extending payment terms always help?+
Not always — pushing terms too far raises supplier prices or risk premiums. Supply-chain finance usually delivers the same cash benefit at lower relationship cost.