Quick Reference: Working Capital, Runway, or DSO?
Recall when each core cash metric is the most useful decision tool.
Which metric best answers, "Where is cash tied up right now?" Working capital. It points to current assets and current liabilities, especially receivables, inventory or prepaids, and payables timing. Which metric best answers, "How many days of sales are still sitting in receivables?" DSO. It translates receivables into time, making collection delay easier to interpret. Which metric best answers, "If current burn continues, how much time do we have left?" Runway. It converts current cash and burn into an operating clock for decision-making. What is the strongest way to use these metrics together? The sequence keeps the diagnosis precise instead…
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