This working capital cycle template shows you how to calculate the working capital cycle given the inventory days, receivable days, and payable days.
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The Working Capital Cycle for a business is the length of time it takes to convert net working capital (current assets less current liabilities) all into cash. Businesses typically try to manage this cycle by selling inventory quickly, collecting revenue from customers quickly, and paying bills slowly, to optimize cash flow.
For most companies, the working capital cycle works as follows:
Working Capital Cycle = Inventory Days + Receivable Days − Payable Days
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