Working Capital Management Framework
Optimise receivables, payables and inventory to free cash.
- Cash conversion is everyone's job
- Working capital is bought with policy, not effort
- Customer, supplier and inventory levers, balanced
- Receivables management
- Payables optimisation
- Inventory & supply chain finance
- Working capital diagnostics
- Cross-functional working capital council
- Monthly CCC review
- Quarterly supplier and customer policy review
- Credit limits and approvals
- Payment-term governance
- Inventory write-down policy
How this framework is measured
Cash Conversion Cycle (CCC)
Formula · DSO + Inventory Days − DPO
Threshold · ≤ industry median
Days Sales Outstanding (DSO)
Formula · (Receivables / Revenue) × 365
Threshold · ≤ policy target
Days Payable Outstanding (DPO)
Formula · (Payables / COGS) × 365
Threshold · ≥ supplier-term policy
Inventory Days
Formula · (Inventory / COGS) × 365
Threshold · ≤ category target
Working Capital Ratio
Formula · Current Assets / Current Liabilities
Threshold · ≥ 1.2×
Related dashboards
Related resources
DSO / DPO / Inventory-Days Tracker
Monthly tracker for the three working-capital levers with target bands.
Toolkit · ProfessionalReceivables & Collections Playbook
Operational playbook to accelerate receivables and reduce DSO.
Toolkit · ProfessionalPayables Optimisation Toolkit
Extend DPO without damaging supplier relationships.
Toolkit · ProfessionalInventory Optimisation Toolkit
Reduce inventory days without breaking service levels.
Maturity Tool · FreeWorking Capital Maturity Self-Assessment
Twenty-statement self-assessment of working-capital maturity.
Related across the Finance & Treasury Centre
Finance & Treasury Centre
assessmentWorking Capital Assessment
dashboardWorking Capital Dashboard
resourceDSO / DPO / Inventory-Days Tracker
resourceReceivables & Collections Playbook
resourcePayables Optimisation Toolkit
resourceInventory Optimisation Toolkit
resourceWorking Capital Maturity Self-Assessment