Finance Tools
Input Cost Increase Cash Flow Gap Calculator
Estimate how higher input costs increase the cash flow gap by widening the cash conversion cycle (inventory, AR, AP).
Estimate how input cost inflation increases your cash flow gap using the cash conversion cycle (CCC).
Used to estimate annual purchases.
New unit cost will be calculated.
Days inventory is held.
Days to collect cash.
Days to pay suppliers.
Annual purchases
Before: $4,800,000
After: $5,376,000
Daily purchases
Before: $13,151 / day
After: $14,729 / day
Change: +$1,578 / day
Estimated cash flow gap (planning)
Before: $789,041
After: $883,726
Added cash needed: +$94,685
Approximation: cash gap ≈ daily purchases × CCC.
This is a simplified planning model using CCC (DIO + DSO − DPO). It estimates how higher input costs increase the cash you must fund across the cycle.
How it works
- CCC = DIO + DSO − DPO.
- Annual purchases = annual units sold × unit cost.
- Daily purchases = annual purchases ÷ 365.
- Cash gap ≈ daily purchases × CCC (planning estimate).
- Higher input costs increase daily purchases → larger cash gap.
FAQ
Is this exact accounting?
No—this is a simplified planning model to estimate added cash needs. Actual cash flow depends on payment schedules and inventory accounting.
What if CCC is negative?
You may collect cash before paying suppliers. The model still shows purchase-cost increases, but your cash gap can be structurally different.
How to use this input cost increase cash flow gap calculator
- Enter annual units sold and unit cost (before) and cost increase (%).
- Enter inventory days, accounts receivable days, and accounts payable days.
- Review the cash conversion cycle and estimated cash tied up (before vs after).
- See the added cash needed due to higher input costs.
Example
Annual units sold 600,000, unit cost $8, cost increases 12%, DIO 60, DSO 30, DPO 30.
- CCC = 60 + 30 − 30 = 60 days
- Daily purchases (before) = (600,000×8)/365
- Daily purchases (after) = (600,000×8.96)/365
- Cash tied up ≈ daily purchases × CCC
- Added cash need = after − before
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