Working Capital Requirement Calculator

About this calculator

The working capital requirement (WCR) is the cash a business needs to fund the gap between paying its suppliers and collecting from its customers, driven by the cash conversion cycle: Days Inventory Outstanding + Days Sales Outstanding − Days Payable Outstanding. This calculator applies that cycle-day figure to daily revenue (annual revenue ÷ 365) to estimate how much cash is tied up in operations at any given time.

CFOs, financial analysts and small-business owners use WCR to plan short-term financing needs — a growing company with a long cash conversion cycle (holding inventory a long time, offering generous customer payment terms, but paying suppliers quickly) can be profitable on paper yet run out of cash, which is exactly the scenario WCR is designed to flag before it becomes a liquidity crisis. Lenders also use it when structuring a revolving credit facility sized to a business's actual operating cycle rather than a flat percentage of revenue.