The cash cycle – quite simply – is the delay between the time you pay your bills and the time you collect payments from your customers. It’s determined by the interplay among accounts payable, inventory, and accounts receivable:
The shorter your cash cycle, the less cash you’ll need to support the growth of your business. Short cash cycles are, in a sense, more efficient.
In this workshop, we’ll use a visual model to explore the drivers of the cash cycle and different rates and kinds of growth.
You’ll learn how to use such models to weigh the complex tradeoffs inherent in different marketing channel strategies, profit margins, and growth rates. You’ll also see how they can be used to get a better idea of how much external financing your business might need – and for how long you’ll need it.