Free calculator
Working capital calculator
Enter your annual sales, cost of goods and the days money spends in stock, with customers and owed to suppliers. See how much cash your trading cycle ties up and what a 10% growth spurt would add.
Cash tied up in the cycle
Working capital needed
$0
- Cash conversion cycle0 days
- Held in debtors$0
- Held in stock$0
- Funded by suppliers$0
- Gap after your spare cash$0
- Extra needed for 10% growth$0
An estimate from your own inputs. Not an approval or offer of finance.
Talk about covering the gap →Numbers look workable?
A 60-second enquiry shows what is realistic for your business. No credit check to enquire, and a real person reviews it and calls you.
Why profitable businesses still run short of cash
Profit is an accounting result. Cash is what is in the bank on Thursday when the wages go out. The two drift apart because of timing: you buy stock or materials, hold them, sell on terms and then wait for customers to pay, while your own suppliers want paying in the meantime. The money stuck in that loop is your working capital requirement, and it grows every time sales grow.
This calculator puts a dollar figure on that loop. It multiplies your daily sales by the days customers take to pay, adds your daily cost of goods multiplied by the days stock sits on hand, and subtracts the credit your suppliers give you. The result is the cash the business needs just to keep turning over, before anything goes wrong.
Reading the result
- A short cycle (under about 30 days) usually means everyday swings can be handled by a modest line of credit.
- A long cycle means more cash is locked up. Shortening it, by invoicing faster, chasing debtors or carrying less stock, is free money. Our guide to cutting debtor days shows how.
- A big growth number is a warning that growth itself will eat cash. Plan funding before you take on the extra work, not after.
Which funding covers a working capital gap?
Gaps that come and go suit a revolving facility you draw and repay. A gap caused by slow-paying business customers can be covered by invoice finance, which grows with your debtor book. A one-off step up, such as a big new contract, suits a fixed working capital loan repaid from that contract's income. Where the gap is large, property security can support amounts from $20k to $5m.
Know your number? Make a 60-second enquiry and tell us what the gap is. No credit check to enquire, and your details stay with one team.
Questions about this tool
What is the cash conversion cycle?
It is the number of days between paying for what you sell and collecting the cash for it. Add the days stock sits on the shelf to the days customers take to pay, then subtract the days your suppliers give you. The longer the cycle, the more cash the business needs to keep running.
Where do I find debtor days and stock days?
Your accounting software usually shows an aged receivables report and stock on hand. Debtor days are roughly what customers owe divided by annual sales, times 365. Stock days are stock on hand divided by annual cost of goods sold, times 365. Your accountant can confirm the figures.
Should a line of credit cover the whole gap?
Not usually. Part of the gap should be covered by your own cash and retained profits. A line of credit is best sized to cover the seasonal or growth-driven swings on top of that base, so you are not paying for a limit you never use.
Why does growth make the gap bigger?
If your cycle stays the same, every extra dollar of sales ties up more cash in stock and debtors before it is collected. That is why fast-growing businesses can be profitable and still run short of cash.
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One 60-second enquiry. No credit check to enquire, no spraying your details around, and a real person who actually calls you back.
- $5k to $500kunsecured and lines of credit
- $20k to $5mproperty-secured, no valuation
- 60 secto enquire, no credit check