Working Capital Cycle & Days Cash Is Tied Up

Cycle days = input-to-harvest days + harvest-to-sale days − supplier credit days. It counts the time from when you pay for inputs until you collect cash from the sale, then subtracts the days your suppliers let you delay payment. A crop with 120 days from planting to harvest, 30 days from harvest to sale and 45 days of supplier credit has a cycle of 120 + 30 − 45 = 105 days of cash tied up. The tool adds the first two and subtracts the third.

It is the number of days your own cash is locked up in producing and selling a crop before it comes back as sales receipts. The longer the cycle, the more cash you must fund from savings or an operating loan to bridge the gap between paying for inputs and being paid for the harvest. A short or even negative cycle means suppliers and timing finance much of the crop for you.

The time from when you commit cash to the crop — buying seed, fertiliser, fuel and paying for field operations — until the crop is harvested. For a grain crop this is roughly the growing season; for a perennial or storage crop it can be longer. It is the production leg of the cycle, during which cash is sunk in the field with nothing yet to sell.

The time from harvest until you actually receive cash for the produce. If you sell at the farm gate on delivery it is near zero; if you store grain waiting for a better price, or sell on terms and wait for the buyer to pay, it can be weeks or months. This leg captures storage and receivables time, when value sits in the bin or in an unpaid invoice.

Because credit from your suppliers funds part of the crop for free. If a merchant lets you buy inputs now and pay in 45 days, that is 45 days you do not have to cover with your own cash. Subtracting the credit period gives the net cash cycle — the days you genuinely fund yourself — rather than the gross operating cycle that ignores supplier financing.

Yes. If supplier credit is longer than the combined input-to-harvest and harvest-to-sale time, the cycle goes negative, meaning you collect cash from the sale before your input bills fall due. Suppliers and timing are financing the crop for you, which is an excellent liquidity position. It is uncommon in farming because growing seasons are long, but it can happen with quick-turnaround or contract-funded crops.

Three levers: shorten production where agronomy allows, sell sooner after harvest rather than storing for a hoped-for price rise, and negotiate longer supplier credit. Forward contracts that pay on delivery, faster-collecting buyers and input financing all trim the cycle. A shorter cycle frees cash, cuts operating-loan interest and reduces the risk of a cash crunch mid-season.

The cycle sets how long and how much you need to borrow. A long cash cycle means a bigger, longer-drawn operating line to bridge the gap from paying inputs to collecting sales, which means more interest. Shortening the cycle directly reduces the size and duration of that borrowing, so the cycle is a practical lever for cutting financing cost and easing cash-flow pressure.

No — cycles vary widely by crop and marketing plan. A fast vegetable sold at harvest has a short cycle; a grain stored for months, or a perennial with a long establishment phase, has a long one. That is why you enter the three timings for your specific crop and plan. Comparing cycles across crops helps you see which enterprises tie up cash longest.

They're solid working figures for cash-flow planning. Real cycles vary with weather-driven harvest timing, actual marketing dates and how promptly buyers pay, and a full analysis layers in the size of each cash outflow, not just the days. Use this cycle to plan your operating loan and spot where to free up cash, then confirm against your actual cash-flow budget.