Working Capital Calculator

Written byOleh Soloninupdated 5 October 2026

Inventory

Receivables

Payables

Cash

Annual revenue

Annual cost of goods

Result

Working capital$5,500,000.00
Cash cycle, days53.2
Stock sits, days60.8
Customers pay in, days30.4
You pay suppliers in, days38
Current ratio3.2

Where a profitable company runs out of money

Calculates working capital and the cash conversion cycle from inventory, receivables and payables.

Profit and cash are different things. A company can sell everything at a good margin and still be unable to pay wages, because the money is sitting in stock and in invoices that customers have not paid yet.

The cash conversion cycle measures exactly that gap: how many days pass between paying for goods and being paid for them. Shortening it releases cash without selling a single extra unit.

How to use

Enter inventory, receivables, payables and cash in the bank.
Enter revenue and cost of goods for the year — the day counts come from them.
Read the cycle: it is how long your money is out of reach.
Compare the days rather than the money: days do not depend on the size of the business.

What moves the cash cycle

Each row is a run of this calculator at revenue of 36,000,000, cost of goods of 24,000,000, payables of 2,500,000 and cash of 1,000,000. One line changes at a time.

The cycle is days of inventory plus days of receivables minus days of payables. It can be shortened from three sides, and they are not equal: halving the stock takes thirty days off, while two million more in receivables adds twenty. Payables work the other way — the longer you take to pay a supplier, the shorter the cycle.

Runs of this calculator at revenue 36,000,000, cost of goods 24,000,000, payables 2,500,000 and cash 1,000,000.
Changed	Working capital	Days inventory	Days receivable	Days payable	Cycle
starting figures	5,500,000	60.8	30.4	38	53.2
inventory 2,000,000	3,500,000	30.4	30.4	38	22.8
receivables 5,000,000	7,500,000	60.8	50.7	38	73.5

What this calculator shows

Working capital and the current ratio
The cash cycle in days
How long stock sits, how long customers take and how long you take to pay

What to keep in mind

Days are calculated against annual revenue and annual cost of goods with a 365-day year; do not enter quarterly totals, because the day count would no longer match.
Only the operating items are counted. Loans, tax balances and other short-term liabilities also affect liquidity.

FAQs

Can the cycle be negative?

It can, and it marks real bargaining power: the customer pays before the supplier is due. Retailers who sell for cash at the till and pay suppliers in sixty days run that way — the business is financed by its own suppliers.

Is more working capital better?

Not necessarily. It shows current assets exceed short-term liabilities, but it does not guarantee cash when a bill falls due — and it can mean money is sitting in stock and receivables rather than working.

How do I shorten the cycle?

Three levers: hold less stock, invoice and chase faster, and negotiate longer terms with suppliers. The third is usually the least painful.

What is the cash conversion cycle?

How long money stays out of the business: days of inventory plus days of receivables minus days of payables. Fifty-three days means nearly two months pass between paying the supplier and being paid by the customer.

Worked example

A trading company

Input: 4M inventory, 3M receivables, 2.5M payables, 1M cash, 36M revenue, 24M cost of goods

Output: 5.5M of working capital and a 53-day cycle

Note: Stock sits 61 days, customers pay in 30, suppliers are paid in 38. The cash conversion cycle is 53 days: that long passes between paying suppliers and being paid by customers, and the gap has to be financed somehow — the calculation does not say from where.

Useful links

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Working Capital Calculator

Result

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