This is part 3 in a mini-series on working capital (check out part 1 here and part 2 here). Let’s recap the basics so far: With the basics covered, how do you spot warning signs in working capital? Let’s pull some real data from a real company here… what you’re seeing below is 22 quarters (5.5 years) of data highlighting days inventory…
We’re big fans (and users) of Gino Wickman’s EOS (Entrepreneurial Operating System), which outlines a useful framework for business management. I’d highly recommend if you’re in need of a basic structure for meetings, people management, and setting a company vision. What it lacks is a robust financial management structure, or what I’ll refer to as a Financial Operating…
We’ve covered working capital a few times in the past… But today we’re covering probably the all-time most useful ratio when it comes to managing working capital… the Cash Conversion Cycle (CCC). What is it? Your CCC measures how long (measured in days) it takes a dollar of cash to move through your business, from start…