Working capital is the second-largest use of cash on most operating-company balance sheets — and the only one that responds to operational discipline inside a single quarter. This pillar covers how we model it, defend it through a peg negotiation, and free it without breaking the operating model. Written from the partner seat, not the audit chair.
Current assets minus current liabilities, with cash and short-term debt stripped out. In practice: AR + inventory + prepaid expenses − AP − accrued liabilities. For most $20–$500M operating companies, the cycle sits at 60–120 days. Compressing it by ten days frees 2.7–5.5% of revenue in permanent cash.
No single lever is the answer. The mix of levers is what defines an operator-led approach vs. a one-time cash-extraction sprint that breaks the operating model six months later.
The single most-used artifact in our fractional-CFO retainers. Rolling 13-week view of cash by week, with scenario layers for capital decisions. We maintain seven industry variants — pick the one that matches your operating model.
Most DTC brands run a P&L forecast and call it a cash forecast — they are different documents. This is the 13-week template we hand to founders in the first week of an engagement: the 18 lines that matter, the Monday cadence, and the failure modes I see most.
Read the templateCPG cash runs on two cycles at once — the operating cycle (PO to manufacture to ship to collect) and the trade-promotion cycle (accrual to deduction to dispute). The 13-week template below carries both, week by week.
Read the templateHotel groups carry the highest seasonality of any operating business we work with, and the 13-week cash document has to absorb it. The template we use in independent engagements, and what makes hotel cash different.
Read the templateBrands running DTC plus marketplaces, wholesale, and retail have four payment cadences, four reserve regimes, and inventory across five pools. The 13-week document has to handle each channel separately, then roll them.
Read the templateMining services cash is event-driven: majors pay on milestone, projects demob on dates that slip, equipment finance falls due on schedule. The 13-week document has to absorb event lumpiness, operator-specific receivables timing, and a fixed equipment-finance line. Here is the template and the Monday cadence.
Read the templateServices cash moves on a clock the WTI chart does not show. Day-rate renewals cluster, utilisation leads revenue by four weeks, slow-pay is structural, and equipment finance prints whether the fleet is hot or stacked.
Read the templateMost DTC brands run SKU profitability on supplier-invoice cost and find, in a sale or margin event, that true landed cost sits 18%–35% above the number. The four-component framework and the range-rationalisation conversation it unlocks.
Read the templateIf you are selling a business in the next 18 months, the working-capital peg is the single most expensive negotiation you will run. Not the headline EV, not the earn-out structure — the peg. Buyers anchor low using a trailing-12-month average; sellers defend with a normalised average that strips out unrepresentative quarters.
For a $40M-revenue business with a 60-day operating cycle, every $1M of peg movement equals 25 days of working capital — and at a 10× EBITDA multiple on $4M of normalised EBITDA, two $1M peg movements is 0.5 turns of multiple. The negotiation is technical; the dollars are not.
Three named partners cover the sector range. The partner who leads your engagement has run the operating role.
Consumer brands — DTC, CPG, omnichannel, manufacturing. 50+ engagements; works the channel-by-channel cycle and the inventory-positioning lever hard.
Operating businesses — hotel groups, DSO, real estate, construction, professional services. RevPAR + deposit cycles + same-store working capital reads.
Resources + capital-intensive — oil & gas, mining, CPG/DTC in cyclical contexts, agencies. JV accounting, royalty cycles, commodity-downturn cash management.
Thirty minutes with the partner in your sector. No deck, no pitch — bring the schedule, leave with a ranked list of the five working-capital levers that move dollars in your business specifically.
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