Finance & Business Plan

Working Capital Calculator

Quantify your net operating working capital (inventory + receivables - payables) and your cash conversion cycle in days, plus the extra cash that growth will tie up.

Updated: Giugno 2026

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Average inventory value ($)Accounts receivable ($)Accounts payable ($)Annual cost of goods sold ($)Annual purchases ($)Annual revenue ($)Expected revenue growth (%)

Working capital

Net operating working capital$0.00

Days inventory outstanding (DIO)50.69 d

Days sales outstanding (DSO)3.65 d

Days payable outstanding (DPO)59.19 d

Cash conversion cycle (CCC)-4.84 d

Cash need from growth$0.00

Working capital = inventory + receivables − payables. CCC = DIO + DSO − DPO. Cash need from growth = working capital × growth%.

Negative cash cycle (-4.84 d): you collect before paying suppliers, so they effectively finance your working capital. This is the ideal setup for a cash-based HoReCa business.

Hold the setup: watch that suppliers don't shorten terms and inventory doesn't swell.
Plan the cash need from growth: before expanding, make sure you have the cash to fund the extra working capital.

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Working Capital Formula

NOWC = Inventory + Receivables - Payables

DIO = Inventory / Cost of goods sold x 365
DSO = Receivables / Revenue x 365
DPO = Payables / Purchases x 365

Cash conversion cycle (CCC) = DIO + DSO - DPO

Example: Cash-Based Restaurant

Inventory €25,000, receivables €5,000, payables €30,000 → NOWC €0 (self-financed)
Cost of goods sold €180,000, purchases €185,000, revenue€500,000
DIO: 50.7 days · DSO: 3.65 days · DPO: 59.2 days
Cash conversion cycle: −4.8 days— cash comes in before suppliers are paid

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Risposte dirette

What is net operating working capital?: Net operating working capital (NOWC) is the cash tied up in day-to-day operations: inventory plus trade receivables minus trade payables. It represents money you have committed to stock and to customers who have not yet paid, offset by the credit your suppliers extend to you. A low or negative NOWC means the business largely finances its own operations; a high NOWC means cash is locked in the cycle and unavailable for other uses.
What is the cash conversion cycle?: The cash conversion cycle (CCC) is the number of days between paying for inventory and collecting cash from sales. It equals days inventory outstanding (DIO) plus days sales outstanding (DSO) minus days payable outstanding (DPO). A short or negative CCC is excellent: it means you collect from customers before you have to pay suppliers, so the business funds itself. Many cash-based restaurants achieve exactly this.
How are DIO, DSO and DPO calculated?: DIO = inventory / cost of goods sold x 365, the days stock sits before being sold. DSO = receivables / revenue x 365, the days customers take to pay. DPO = payables / purchases x 365, the days you take to pay suppliers. Each translates a balance-sheet figure into a duration, which makes the working-capital position intuitive and comparable over time.
Why can a restaurant have negative working capital?: Restaurants typically collect cash immediately (low receivables) but pay suppliers on 30-60 day terms (high payables), while holding only modest inventory. That combination can make payables larger than inventory plus receivables, giving negative working capital and a negative cash conversion cycle. It is a genuine advantage: customers effectively pre-fund the operation, freeing cash for growth or to cushion the low season.
How does growth affect working capital?: If working capital is positive, growing sales ties up proportionally more cash in inventory and receivables, so fast growth can create a cash squeeze even when profitable, the so-called overtrading risk. If working capital is negative, growth can actually release cash. The calculator shows the additional working capital a given level of growth will require so you can plan financing before scaling up.

Quick answers

Frequently Asked Questions

What is net operating working capital?

Net operating working capital (NOWC) is the cash tied up in day-to-day operations: inventory plus trade receivables minus trade payables. It represents money you have committed to stock and to customers who have not yet paid, offset by the credit your suppliers extend to you. A low or negative NOWC means the business largely finances its own operations; a high NOWC means cash is locked in the cycle and unavailable for other uses.

What is the cash conversion cycle?

The cash conversion cycle (CCC) is the number of days between paying for inventory and collecting cash from sales. It equals days inventory outstanding (DIO) plus days sales outstanding (DSO) minus days payable outstanding (DPO). A short or negative CCC is excellent: it means you collect from customers before you have to pay suppliers, so the business funds itself. Many cash-based restaurants achieve exactly this.

How are DIO, DSO and DPO calculated?

DIO = inventory / cost of goods sold x 365, the days stock sits before being sold. DSO = receivables / revenue x 365, the days customers take to pay. DPO = payables / purchases x 365, the days you take to pay suppliers. Each translates a balance-sheet figure into a duration, which makes the working-capital position intuitive and comparable over time.

Why can a restaurant have negative working capital?

Restaurants typically collect cash immediately (low receivables) but pay suppliers on 30-60 day terms (high payables), while holding only modest inventory. That combination can make payables larger than inventory plus receivables, giving negative working capital and a negative cash conversion cycle. It is a genuine advantage: customers effectively pre-fund the operation, freeing cash for growth or to cushion the low season.

How does growth affect working capital?

If working capital is positive, growing sales ties up proportionally more cash in inventory and receivables, so fast growth can create a cash squeeze even when profitable, the so-called overtrading risk. If working capital is negative, growth can actually release cash. The calculator shows the additional working capital a given level of growth will require so you can plan financing before scaling up.

Italian version: Calcola capitale circolante