Working Capital Cycle Template
This working capital cycle template shows you how to calculate the working capital cycle given the inventory days, receivable days, and payable days.
This is what the working capital cycle template looks like:
Download the Free Template
Enter your name and email in the form below and download the free template now!
Working Capital Cycle TemplateDownload the free Excel template now to advance your finance knowledge!
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.
Steps in the Working Capital Cycle
For most companies, the working capital cycle works as follows:
- The company purchases materials to manufacture a product on credit (for example, they have 90 days to pay for the raw materials).
- The company sells its inventory in 85 days – on average (days payable outstanding).
- The company receives payment from customers for the products sold in 20 days – on average.
Working Capital Cycle Formula
Working Capital Cycle = Inventory Days + Receivable Days − Payable Days
More Free Templates
For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation, and Word document templates.