Working capital benchmarks

Evaluate operating liquidity, cash-conversion timing and short-term financing exposure.

Use a business and a defined operating cycle as the assessment unit. Separate a temporary timing gap from persistent negative operating cash flow. Preserve seasonality and the contractual maturity of the financing.

Financial-risk measures

Measure	Definition and comparison rule
Cash-conversion cycle	Receivable days plus inventory days minus payable days, using consistent flow and average-balance periods.
Collection timing	Days from invoice or contractual due date to payment, with unpaid invoices retained as censored observations.
Payables pressure	Supported overdue obligations and their aging, excluding valid credits or disputed items as defined.
Liquidity headroom	Available cash and valid undrawn funding against supported near-term cash needs.
Financing dependence	Frequency and amount of new funding needed to cover operating shortfalls, with internal transfers excluded.

Do not compute inventory days for a service business without inventory or compare its cycle directly with a retailer’s. Identify whether receivable days use credit sales or total revenue.

Public benchmark sources

ISED’s 2024 credit-condition report identifies working or operating capital as the intended use for 49% of debt-financing borrowers in its survey. This describes financing purpose, not an acceptable liquidity ratio or default rate.

Match operating-cycle benchmarks to industry, business size and season. The AMLOK public-record inventory includes financial facts and financing observations, but invoice-level collection timing requires a suitable ledger with payment links and sufficient follow-up.

AMLOK evaluation

Test aging-bucket accuracy, invoice and payment reconciliation, forecast error and cash-gap identification. Use an as-of snapshot so later payment dates and backfilled accounting entries do not leak into the decision inputs.

For Signal, measure confirmed liquidity changes, false alerts per business-month and warning lead time against a defined funding or payment event. Compare a seasonal baseline with the evaluated model on the same business-periods. Report uncertainty when ledger or payment coverage is incomplete.

Follow the financial analysis protocol and common benchmark contract.