Here we have the working capital days for a company. I'm going to focus on year 1 Receivable days were 30, inventory days were 19, payables days 34 These days impact the funding of a company If I think, if receivable days are 30, well that means cash is tied up with customer for 30 days and I require funding for that period, 30 days I need to add onto that the fact that cash was tied up as inventory before it was sold and then became a receivable for 19 days So cash was tied up for 30 plus 19, for 49 days. That's a lot of funding required! However, we had a free source of funding in payables I owed my supplier so I had my supplier's cash for 34 days So the net of all of them is the working capital cycle I need funding for 15 days overall Now that can have a number of different names: working capital cycle, operating cash cycle, operating working capital cycle All the same thing Now seeing the changes overtime can see how funding changes overtime My receivables days is coming down I.e. funding is required for less of a period and thus less funding is needed My inventory days however is going up I've got funds tied up as inventory for a longer period, that means more funding is required And lastly my payables days is coming down. Remember payable days, that represents free funding (I've got my suppliers cash) If payables days is decreasing, that means the period of free funding is decreasing Which ultimately means more funds are required