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.
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Formula
Calculates the difference in cash tied up in inventory "on the water" or in the warehouse due to cost and duration changes.
Worked Example
The Cash Cost of Disruption
- 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.
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