All experiments
Labs
The cash tied up in growth
A shorter cycle frees up money.
Live experiment
The cash tied up in growth
Cash conversion cycle75 days
Before you move a sliderWhy can collecting ten days sooner release cash without a single new sale?
Cash conversion cycle = 45 + 60 − 30 = 75 days
Read the mechanism
Receivables and inventory hold cash hostage; payables lend some of it back. Collecting sooner releases cash without changing a single sale. Stretching suppliers works too, until they stop delivering.
Model assumptions and units
Made-up $000, a 365-day year and steady activity. Purchases are approximated by cost of sales for the payables days. Net working capital here is receivables plus inventory minus payables; cash and debt are left out. Seasonality and growth need fuller schedules.