Cash Cycle: Days of Stock, Receivables and Payables

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Sales for the year $

Cost of goods sold for the year $

Stock (inventory) $

Owed by customers $

Owed to suppliers $

Stock target optional, days

Early-payment discount, optional

Discount %

If paid within days

Otherwise due in days

Enter your numbers, then press Calculate.

From the book, Chapter 10. Northgate: 91.3 days of stock + 3.0 days to get paid − 36.5 days before paying suppliers = a 57.8-day cash cycle. Cutting stock to 75 days would free $64,644. A 2/10 net 30 discount is worth 37.2% a year.

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