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What could faster cash conversion release?
Separate receivables, inventory, and payables improvements.
Example scenario
Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.
- Annual revenue
- $5,000,000
- Annual COGS
- $3,000,000
- Current collection days
- 60 days
- Target collection days
- 45 days
- Current inventory days
- 90 days
- Target inventory days
- 75 days
- Current payment days
- 30 days
- Target payment days
- 40 days
One-time modeled cash release
Example result only, not a forecast or promise.
- From receivables
- $205,479
- From inventory
- $123,288
- From payables
- $82,192
What to do with this result
Prioritize overdue receivables, slow inventory, and supplier terms, assigning an owner and cash-release target to each.
Know what is inside the model.
Planning model, not personalized financial advice. Your inputs remain in your browser.
Calculation method
Cash release = revenue / 365 × (DSO − target DSO) + COGS / 365 × ((DIO − target DIO) + (target DPO − DPO)).
Assumptions and limitations
- Sales and COGS stay constant over a 365-day year.
- A one-time cash release is not recurring profit.
- Longer payment terms must be agreed with suppliers; no penalties or lost discounts are included.