++++ Plate 00 · Inventory cash flowCalculator
Free calculator · See your cash cycle with no signup

How much cash is your inventory actually tying up?

Inventory-driven cash crunches kill more scaling brands than bad marketing does. Your cash is locked between paying suppliers and getting paid out. Answer a few questions and see your cash conversion cycle, the cash trapped in stock, and what your next reorder does to runway.

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✓ See your cash conversion cycle and the cash locked in stock instantly. No signup to view your result.
By Taylor Sicard · co-founded WIN Brands Group and scaled it past $100M · inventory and cash is where I have watched the most brands stall
The method behind the number
The cash math that decides whether growth funds itself.
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Method

How the cash conversion cycle is calculated

Cash conversion cycle equals days inventory outstanding, plus your payment processor payout delay, minus the supplier credit you get on the unpaid portion of a purchase order. Cash tied up equals your daily COGS times that cycle. The calculator also sizes the deposit your next reorder takes, because that is the cheque that surprises brands.

Under 30 daysStrong. Cash comes back fast enough to fund the next order without leaning on credit.
30 to 75 daysNormal for most DTC brands. Watch it monthly: longer lead times and deeper buys push it up quietly.
Over 75 daysA risk flag. Growth gets gated by reorders, and a strong sales month can still leave you cash-poor.

Inventory is where growing brands quietly die: the P&L says profit while the bank account says no. The DTC profitability calculator shows whether the margin exists at all, and the returns cost calculator prices the stock that comes back. Both sit in the free DTC calculators suite.

Questions

Common questions

What's a healthy cash conversion cycle for a DTC brand?
Under about 30 days is strong: you get paid before, or close to when, you pay for stock. Between 30 and 75 days is normal but watch it. Over 75 days your inventory is financing itself with your own cash, which is where scaling brands stall.
Why does inventory cause cash crunches?
You pay suppliers weeks before customers pay you. A deposit goes out at the PO, the balance on delivery, then stock sits as locked cash until it sells and the processor pays out. The faster you grow, the bigger the gap, so growth eats cash even when the brand is profitable on paper.
How do I free up cash tied in inventory?
Negotiate net terms with suppliers to raise your days payable, trim slow SKUs to cut days of inventory, and shorten payout delays or reduce processor reserves. Each one pulls a day out of the cash conversion cycle and releases working capital.
Should I use Shopify Capital to fund inventory?
It can bridge a known reorder when a big PO would otherwise drain runway, but price the real cost first. Financing a predictable, fast-selling restock can pay for itself; financing slow or speculative inventory just adds cost on top of locked cash.
What is days inventory outstanding?
The average number of days a unit sits between arriving and selling: inventory value divided by daily COGS. It is the biggest lever in the cash conversion cycle, and the one founders feel last because the P&L never shows it.
Do supplier payment terms really move the cycle?
More than almost anything else. Every day of terms is a day cut straight off your cash conversion cycle. Moving from a large deposit to net terms on the balance can free more cash than a month of sales growth.