Enter sales and the average days of inventory, collection and payment to see how long cash is tied up, what it costs and how much is freed by shortening the cycle.
Pre-sizing and estimating tool: results do not replace design, calculations or reports signed by a licensed professional, nor verification against the applicable codes and standards.
From receiving goods to collecting from the customer; the red band is the period the company finances.
Receivables and inventory consume cash; payables fund operations.
The report gathers this page's inputs, results, equations, assumptions and references, with fields for project, engineer and revision. In the print dialog, choose Save as PDF.
Add days inventory outstanding and days sales outstanding, then subtract days payable outstanding. With 45 days of inventory, 45 of receivables and 35 of payables, the cycle is 55 days.
Cash tied up in operations: receivables plus inventory minus payables. It must be funded with equity or short-term borrowing.
By cutting inventory (smaller lots, higher turns), collecting faster (early payment discounts, selective factoring) and negotiating longer supplier terms.
Important notice: Indus Metrics tools produce estimates and pre-sizing results from the data you enter and from published engineering methods. They do not replace design, calculations or reports signed by a licensed professional engineer (PE), nor verification against the applicable codes, standards and regulations, such as OSHA rules and the ASME codes. Material and fuel properties vary: check manufacturer data or your own process analyses before deciding. By using this site you agree to the Terms of Use.
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