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Working Capital Calculator
The cash conversion cycle, the money it ties up, and what faster collection would release.
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Result
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Profitable businesses run out of cash all the time. The gap between the two is working capital, and it is measured in days.
The cash conversion cycle
Days to collect from customers, plus days stock sits, minus days your suppliers give you. That total is how long your money is out of reach. At ₹5 crore of revenue, every ten days of receivables is about ₹14 lakh locked up.
The cheapest lever
Collection terms. Invoicing on the day of delivery rather than at month end removes a fortnight at no cost. Taking a deposit on custom orders removes more. Chasing the oldest five invoices weekly beats chasing the whole ledger monthly.
Negative working capital
Where customers pay before suppliers do — retail, subscriptions, advance-booking models — growth funds itself. It is the structural reason some businesses scale without debt and others need an overdraft to grow at all.
Frequently asked questions
What is the cash conversion cycle?
Days to collect from customers, plus days inventory sits, minus days of credit your suppliers give you. It measures how long your money is out of reach, and it is the clearest single indicator of how much funding growth will need.
How do I reduce working capital needs?
Collection terms are the cheapest lever. Invoice on the day of delivery rather than at month end, take deposits on custom orders, and chase the oldest five invoices weekly instead of the whole ledger monthly.
Why is a profitable business short of cash?
Because profit is recorded on invoicing and cash arrives on collection. A business growing 40% a year with 60-day receivables funds every new rupee of sales for two months before seeing it.
What is negative working capital?
Where customers pay before suppliers do — retail, subscriptions and advance-booking models. Growth then funds itself, which is the structural reason some businesses scale without debt.