August 2020
Intermediate to advanced
425 pages
11h 12m
English
book
The Business Model Navigator, 2nd Edition
by Oliver Gassmann, Karolin Frankenberger, Michaela Choudury, Michaela Csik
Content preview from The Business Model Navigator, 2nd Edition
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Chapter 6
Cash Machine
Coining money with negative working capital
The pattern
The Cash Machine pattern involves running a business with a negative cash conversion cycle. As will be seen from the following formula, the cash conversion cycle is the timespan between the spending and collection of cash by a company. More specifically, it defines the average storage time of inventory, including raw materials, work-in-process, finished products and delayed payment terms by customers and suppliers:
| Cash conversion cycle | = | Inventory conversion period |
| + | Receivables conversion period | |
| − | Payables conversion period |
In order to run a ...
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