Cash Conversion Cycle Calculator
6 Steps to Releasing Trapped Working Capital
Digital Negotiable Instruments (DNIs) can be a smart choice for the modern Treasurer as a safe and efficient way of unlocking working capital. They don’t introduce unwelcome risk or limit you to just one bank or source of funding.
Use our calculator to find out how to accelerate your working capital.
This calculator provides a useful general indication of the benefits achievable through use of Digital Negotiable Instruments.
No data is retained and the results remain confidential to you.
- Step 1
- Step 2
- Step 3
- Step 4
- Step 5
- Step 6
Enter these figures from your financial report. No need to specify currency.
Here is your current Cash Conversion Cycle based on the figures entered in Step 1.
We can now calculate how the DNI has reduced the liquidity requirement for your business.
If you are able to provide your Weighted Average Cost of Capital we can determine the cost saving realised by reducing the liquidity requirement.
Finally, the resulting change in Trade Payables to your balance sheet.
Enter your liquidity data to see your cash conversion cycle numbers here
Current Cash Conversion Cycle
New Cash Conversion Cycle Score
Liquidity Tie-Up
Liquidity Benefit
Liquidity Benefit Cost Saving
Trade Payables Status
- Terms of use
- Privacy Policy
- © Arqit. All rights reserved.
6 Steps to Releasing Trapped Working Capital
6 Steps to Releasing Trapped Working Capital
STEP 1
Enter these figures from your financial report. No need to specify currency.
Gross Sales
1,285,398,667
Cost of Goods Sold
405,725,000
Inventory
203,295,000
Trade Receivables
190,570,000
Trade Payables
117,460,000
For more information, contact us at: contactus@tradesecure.uk
6 Steps to Releasing Trapped Working Capital
STEP 2
Here is your current Cash Conversion Cycle based on the figures entered in Step 1.
Days Inventory Outstanding (DIO)
(Inventory/Cost of Goods Sold x 365)57.7
Days Sales Outstanding (DSO)
(Trade Receivables/Gross Sales x 365)54.1
Days Payable Outstanding (DPO)
(Trade Payables/Cost of Goods Sold x 365)33.4
Current Cash Conversion Cycle
(DIO+DSO-DPO)78.5
For more information, contact us at: contactus@tradesecure.uk
6 Steps to Releasing Trapped Working Capital
STEP 3
Your Current DPO Is
(Trade Payables/Cost of Goods Sold x 365)33.4
By What Percentage Would You Like To Extend Payment Terms Using A DNI?
5.00
%New Days Payable Outstanding
(DPO/% Increase)35.1
This results in a new cash conversion cycle score
(DIO+DSO-New DPO)For more information, contact us at: contactus@tradesecure.uk
6 Steps to Releasing Trapped Working Capital
STEP 4
We can now calculate how the DNI has reduced the liquidity requirement for your business.
Current liquidity Requirement
(Gross Sales/365 x Existing CCC)276,405,000
New liquidity Requirement
(Gross Sales/365 x Existing CCC)122,698,706
Liquidity Benefit
(Current Liquidity Requirement - New Liquidity Requirement)156,706,294
For more information, contact us at: contactus@tradesecure.uk
For more information, contact us at: contactus@tradesecure.uk
6 Steps to Releasing Trapped Working Capital
6 Steps to Releasing Trapped Working Capital
STEP 5
If you are able to provide your Weighted Average Cost of Capital we can determine the cost saving realised by reducing the liquidity requirement.
WACC
7.00
%Liquidity Benefit Cost Saving
(Liquidity Benefit x WACC)10,759,441
For more information, contact us at: contactus@tradesecure.uk
6 Steps to Releasing Trapped Working Capital
STEP 6
Finally, the resulting change in Trade Payables to your balance sheet.
Existing Trade Payables
117,460,000
New Trade Payables
(Cost of Goods Sold X New DPO / 365)217,166,294
For more information, contact us at: contactus@tradesecure.uk
6 Steps to Releasing Trapped Working Capital
YOUR CASH CONVERSION CYCLE NUMBERS
Current Cash Conversion Cycle
78.5
New Cash Conversion Cycle Score
35.1
Liquidity Tie-Up
Liquidity Benefit
156,706,294
Liquidity Benefit Cost Saving
10,759,441
Trade Payables Status
For more information, contact us at: contactus@tradesecure.uk
For more information, contact us at: contactus@tradesecure.uk