Working Capital Gap Calculator
Convert cash conversion cycle into a funding need
Growth can create a cash gap even when the income statement looks healthy. This calculator estimates how much cash is tied up in receivables and inventory, net of supplier financing from accounts payable.
- ✓Calculates cash conversion cycle from A/R, inventory, and A/P days
- ✓Converts operating timing into a dollar funding gap
- ✓Separates receivable, inventory, and supplier-financing impact
| Component | Amount | Method |
|---|---|---|
| Accounts receivable | $246,575 | 45 days of sales |
| Inventory investment | $106,849 | 30 days of COGS |
| Supplier financing | -$89,041 | 25 days of COGS financed by vendors |
| Working capital gap | $264,384 | Estimated operating funding need |
Frequently Asked Questions
What is a working capital gap?
It is the cash tied up between paying for goods or labor and collecting from customers, reduced by any supplier credit you receive.
How does A/R days affect borrowing need?
Longer collection cycles increase the amount of revenue sitting in receivables, which increases working capital needs.
Why include A/P days?
Accounts payable acts like supplier financing. More A/P days can reduce the external funding needed to support the operating cycle.
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This tool is for educational purposes only. Results do not constitute a loan offer, pre-qualification, or guarantee of financing. Consult a licensed financial professional for advice specific to your situation.