Yenra original fictional cash-cycle example — September 6, 2026
Reusable teaching data; not actual company performance or a forecast.

Assume steady-state distributor, 365 days, one currency, no sales tax, average balances. Annual credit sales $730,000; annual cost of goods sold $438,000; annual credit purchases $438,000. Purchases equal cost of sales by explicit assumption, not as a universal rule.
Inventory days = average inventory / annual cost of goods sold * 365 = 54000/438000*365 = 45.
Receivable days = average trade receivables / annual credit sales * 365 = 60000/730000*365 = 30.
Payable days = average trade payables / annual credit purchases * 365 = 36000/438000*365 = 30.
Cash conversion cycle = inventory days + receivable days - payable days = 45.

Second scenario changes average receivables only to $40,000: receivable days = 20, cash cycle = 35. Ten-day reduction at $2,000 daily credit sales corresponds to $20,000 lower receivables. Assume improved collection, not write-offs, discounts or reduced sales. It is less cash tied up, not additional profit. Timing of actual receipts requires a separate dated forecast.