Profit and funding are different questions. A seller may pay for products long before the customer payment arrives, even when the eventual sale has a positive contribution. The Working Cash Gap Calculator estimates that waiting period from an entered operating cycle and daily cash cost.
Put the stages in days
Enter supplier lead time seven days, inventory holding 20 days and settlement delay five days. Together they make a 32 day operating cycle. If supplier credit covers ten days, the uncovered funding gap is 22 days.
The model subtracts supplier credit from the combined cycle. Use a credit period that matches the beginning of the cycle you are describing. A different invoice due date or staged payment arrangement may need a more detailed cash schedule outside this simplified calculation.
Multiply the gap by cash consumption
Use five units daily at PKR 600 purchase cost, plus PKR 200 of other daily cash expenditure. Daily requirement is PKR 3,200. Funding for the 22 day gap is therefore PKR 70,400.
This number is a steady flow estimate based on the entered cost rate. It does not include a separate profit target, predict sales receipts day by day or establish a borrowing recommendation.
Longer credit can remove this model’s gap
If supplier credit changes to 40 days while the operating cycle remains 32 days, uncovered days become zero and estimated funding becomes zero. The calculation does not report negative funding as spare cash.
Zero here does not prove the business has no cash obligations. Deposits, irregular purchases, rent dates, refunds and delayed transfers can create a real shortfall even when the simplified steady cycle is covered.
Use the estimate as a starting point for a dated plan
Write actual purchase commitments and expected transfers onto a dated cash schedule before making a financing decision. A large initial stock order may need more money upfront than a smooth daily flow suggests.
Seller Settlement Reconciliation Calculator can explain whether a transfer is lower because of an expense, withholding or held reserve. Inventory Turnover & Days Calculator describes a historical stock period, which can help you review the holding assumption without guaranteeing the next batch behaves the same way.
Keep all day counts, credit terms and daily cost definitions beside the result. Recalculate when supplier timing, stock pace or payout delays change; an old cash gap can look precise while describing an operating cycle you no longer have.