The business question
Where was cash tied up in two profitable e-commerce businesses?
Inventory, marketing and supplier payments created cash demands before customer receipts became available. Reported profit did not show when the business could fund its obligations.
Both businesses reported a profit but struggled to meet obligations consistently. The cash tied up in the operating cycle was not clearly measured.
- My contribution
- Working-capital analysis and rolling cash forecasting
My approach
From the source data
to a commercial answer.
Measure the cash cycle
I calculated inventory, receivables and payables timing from the ledger and traced when customer receipts became available.
Identify the pressure points
I reviewed slow-moving inventory, supplier terms, payment runs and the cash effect of promotions.
Plan the cash requirements
I built a rolling thirteen-week forecast to make shortfalls visible and support changes to stock and payment decisions.
Data used in the analysis
- Inventory and stock movement
- Supplier terms and payment runs
- Receivables ageing
- Bank and cash ledgers
- Promotional and discount data
- Order and fulfilment timing
The recommendation
Release cash from the operating cycle
Release cash through slow-moving stock, better-aligned supplier terms and a review of discounting. Use a thirteen-week forecast to plan payments and identify shortfalls early.
What I delivered
- Cash conversion cycle analysis
- Inventory and payment-term review
- Rolling thirteen-week cash forecast
- Recommendations on stock, terms and discounting
The outcome
What changed
for the business.
More cash available to fund the operating cycle.
The review identified cash tied up in slow-moving stock and payment terms that put supplier payments ahead of customer receipts.
Neither business needed outside funding to fix a liquidity problem that its own operating cycle was creating.
The work covered two businesses that returned to a liquid position. Stock levels, supplier terms and cash balances remain confidential.
Explore an illustrative exampleA simplified view of the approach, using example figures.
This example explains the method. The figures are illustrative and should be read separately from the project outcome.
Cash Conversion Cycle
Illustrative figures- Days inventory held78
- Days sales outstanding34
- Days payable outstanding22
- Cycle, before90
- Cycle, after41
- Funded by operationsyes
Let’s work on it
What decision
is on your desk?
Tell me what you’re trying to decide, what feels unclear and when you need an answer. We’ll start with a short conversation.
Direct collaboration · Scoped engagements · Fixed fees