Working Capital Assessment
Cash Flow & Treasury
Quick Answer
Enter your receivables inventory and payables data. Paste into Claude or ChatGPT. Get a cash conversion cycle analysis with specific actions to reduce working capital and free up cash.
What You Get
A working capital assessment covering cash conversion cycle calculation, comparison to industry benchmarks, identification of the highest-leverage improvement opportunities, and specific actions to reduce working capital requirements and free up cash.
Who Is This For
CFOs improving business cash efficiency, finance managers preparing working capital analysis for lenders, and business owners who want to understand why a profitable business can still run out of cash.
About This Template
Working capital is the cash tied up in the day-to-day operations of your business — the money sitting in receivables, inventory, and prepayments that has not yet turned into cash. Reducing working capital requirements frees up cash without requiring additional revenue or cost cuts. This template guides finance teams through entering their working capital components, then uses AI to calculate the cash conversion cycle, identify inefficiencies, and produce specific recommendations to optimize working capital.
Fill In Your Details
Your company name
e.g. 8500000
e.g. 380000
e.g. 0 for services businesses, 240000 for product businesses
e.g. 95000
e.g. 3400000
e.g. Net 30, Net 45, due on receipt
e.g. Net 30, Net 60
Gather these details then use them to fill in the prompt below.
AI Prompts
Generate working capital assessment
Paste this prompt into Claude or ChatGPT with your data filled in.
You are a CFO conducting a working capital assessment. Using the data below, produce a comprehensive working capital analysis. Company: [company_name] Annual revenue: [annual_revenue] Accounts receivable: [accounts_receivable] Inventory: [inventory] Accounts payable: [accounts_payable] Annual COGS: [cogs_annual] Payment terms offered: [payment_terms_offered] Payment terms received: [payment_terms_received] Calculate and produce: 1. Working Capital Components — net working capital, current ratio, quick ratio 2. Cash Conversion Cycle — DSO plus DIO minus DPO equals CCC in days. Show each component separately. 3. Working Capital Efficiency — how much cash is tied up in working capital per dollar of revenue 4. Industry Benchmark Comparison — compare CCC to typical range for this business type 5. Improvement Opportunities — rank the top 3 working capital levers by potential cash impact 6. Cash Liberation Analysis — how much cash would be freed by reducing CCC by 5, 10, and 15 days 7. Action Plan — specific steps to improve each component of the CCC DSO equals AR divided by (Revenue divided by 365). DIO equals Inventory divided by (COGS divided by 365). DPO equals AP divided by (COGS divided by 365).
Sample Output
This is an example of what AI produces when you use this template.
Cash Conversion Cycle
DSO: $380,000 divided by ($8,500,000 divided by 365) equals 16.3 days. Excellent — this is well below the Net 30 terms offered, indicating strong collections. DIO: $0 divided by COGS — not applicable for this services business. DPO: $95,000 divided by ($3,400,000 divided by 365) equals 10.2 days. This is the problem — you are paying suppliers in 10 days when you have 30-day terms. You are paying 20 days earlier than required. Cash Conversion Cycle: 16.3 days DSO plus 0 days DIO minus 10.2 days DPO equals 6.1 days. This is low, which appears good, but the low DPO is masking an opportunity.
Cash Liberation Analysis
The most impactful action is extending DPO from 10.2 days to 28 days — paying suppliers near their actual due date rather than immediately. This change alone: ($3,400,000 divided by 365) multiplied by 17.8 days equals $165,700 in additional cash freed. This is cash sitting in your suppliers' bank accounts that belongs in yours. At no cost and no risk to supplier relationships — you are simply using the terms they already granted you. Implementing a payment run policy of twice monthly (Day 15 and Day 28) would achieve this automatically.