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Inventory Cash-Flow Calculator
Enter monthly sales, landed unit cost, supplier lead time, transit, safety stock, payout delay and supplier terms. The calculator returns the cash cycle in days, the stock to hold, the cash tied in inventory and payout float, the cash needed before the first payout, runway and the reorder point.
The cycle, not the margin, is what runs a seller out of cash
The cash cycle is the gap between paying a supplier and receiving the marketplace payout: lead time + transit + payout delay − supplier payment terms. A seller with a 30-day lead time, 25 days of freight, a 14-day payout delay and no supplier terms waits about 69 days for each dollar to come back. Growth lengthens the cycle because every increase in sales requires more stock and a larger payout float.
The calculator shows the cash required before the first payout and the monthly cash outflow. Runway is cash on hand divided by that outflow — a short runway with a long cycle is the pattern behind sellers who are profitable on paper and unable to fund the next order.
What doubles when sales double
Inventory cash scales with daily sales: holding lead time, transit and safety stock means more units on hand at a higher sales rate, and the payout float grows with the delay. The extra inventory cash needed to double sales is roughly the current inventory cash, which is why a sudden growth spurt can consume the cash that was meant to fund it.
The reorder point is the same stock-days calculation used as a trigger. Supplier payment terms are the strongest lever: net-30 or a deposit arrangement can shorten the cycle by a month without changing the product or the price. The inventory cash cycle entry sets out the formula and the options.
Seller cost playbooks — all entries
Every entry links to its full reference page. The search box above filters this list.
Frequently asked questions
What is a good inventory cash cycle?
Shorter is safer. The right number depends on your cash buffer and how predictable sales are; the test is whether your cash can fund the full cycle plus one disrupted reorder without borrowing.
How do I calculate the reorder point?
Daily sales multiplied by the stock days you need to cover: supplier lead time, freight transit and safety stock. Place the order when stock on hand plus stock in transit reaches that point.
Does a supplier deposit help?
It can shorten the cycle if it buys payment terms, because the cash leaves later or in smaller amounts. Compare the deposit cost with the cash it frees before treating it as free.
Why is the cash needed before the first payout higher than the inventory value?
Because the payout float is additional cash: goods sold but not yet paid out are still your money sitting with the marketplace. Advertising and fixed costs also fall due during that period.
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