Product Unit Working Capitol


The calculator is designed to help you see whether a product produces marginal cashflow

Marginal cashflow is the cashflow available after direct costs to meet overheads and profits requirements

It is affected by a number of factors:

  1. The gross profit
  2. How long you carry inventory before making a sale
  3. How long you take to pay creditors
  4. How long debtors take to pay you

where you hold inventory for a long time, have a low gross profit , pay your creditors on time but debtors drag their feet, then it is possible that each sale costs you cashflow!

To use the calculator, enter:

  • the individual selling price excluding gst
  • the individual cost price excluding gst
  • the number of units sold
  • the number of days inventory held
  • Days debtors outstanding
  • Days creditors outstanding
  • GST percentage if GST is applicable

the calculator displays:

  • Working capital used
  • Unit marginal cashflow
  • Gross marginal cash flow(total cashfow from the sale of X units)

The calculator takes into account the cashflow effect of GST based on monthly returns.
The effect of other GST payment options is very small and is ignored.

Analysing Results

you can use the calculator to determine whether price or days credit will make the largest difference.

If you have questions call Hugh Plaistowe on 9328 3766