WCR
Working Capital Requirement
Short definition
The working-capital requirement is the operating cash that must stay tied in the cycle. It is derived from target DSO, DIO and DPO and from sales/COGS; cash and financial debt are out.
Detailed explanation
The formula matches OWC; the difference is the target/budget cut. Sales growth lifts the requirement in proportion if days are flat. A margin drop lifts COGS and can swell the inventory need further.
Split permanent and seasonal requirement: the structural AR/inventory floor versus the seasonal peak. Funding tenor should match that split.
Why it matters for the CFO
Growth capital and the short-term line are sized off this amount. Underestimating it is a cash crisis in a profitable year (the illusion).
How it is calculated
WCR ≈ OWC = Alacak + Stok − Ticari borç (hedef günlerle: satış/COGS × DSO/DIO/DPO)
Variables in the formula
- WCR: Operating working-capital requirement
How to read it
WCR / sales is cash required per 1 TL of sales. A fall is productivity or stretched DPO. There is no universal ratio.
Numerical example
Target DSO 73 days, sales 400 mn TL → AR need = 400 × 73/365 ≈ 80 mn TL. DIO 98, COGS 260 → inventory ≈ 70. DPO 58, purchases 250 → AP ≈ 40. WCR ≈ 80 + 70 − 40 = 110 mn TL.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.