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Working Capital Impact Calculator

Calculate how longer shipping cycles and higher landed costs tie up your business cash. Essential for managing liquidity during supply chain disruptions.

Enter Values

Old Daily COGS ($)

Old Lead Time (Days)

New Daily COGS ($)

New Lead Time (Days)

Result

Enter values above and click Calculate to see your result.

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Formula

Core Formula

Old Capital = Old Daily COGS x Old Lead TimeNew Capital = New Daily COGS x New Lead TimeExtra Capital = New Capital - Old Capital

How it works: Calculates the difference in cash tied up in inventory "on the water" or in the warehouse due to cost and duration changes.

Worked Example

Moving from a 30-day $10,000 lead time to a 45-day $12,000 lead time requires an extra $240,000 in working capital.

The Cash Cost of Disruption

Supply chain delays are a major drain on business liquidity.

Higher costs and longer transit times compound each other.
Businesses with low cash reserves are most at risk during lead time spikes.
Negotiate better payment terms with suppliers to offset these impacts.

Plan your cash reserves according to your longest potential lead times.

You can also calculate changes using our Inventory Carrying Cost Calculator or Import Cost Impact Calculator.

Frequently Asked Questions

Why does lead time affect cash?

Money spent on production or purchase is "dead" until the product is sold. The longer the lead time, the longer your cash is trapped.

What is the "cash conversion cycle"?

The time it takes for a dollar spent on inventory to return as a dollar (plus profit) from a sale.

Can I embed this Working Capital Impact Calculator on my website?

Yes. Click the "Embed" button at the top of this page to customize the size, colors, and theme, then copy the iframe code. Paste it into any HTML page, WordPress site, or CMS. It is completely free, requires no signup, and works on all devices. You can also visit our embed guide at calculory.com/services/embed-calculators for more details.

AI Assistant

Ask about this calculator

I can help you understand the working capital impact calculator formula, interpret your results, and answer follow-up questions.

Try asking

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Inventory Carrying Cost Calculator Import Cost Impact Calculator

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