What’s Inside
The Capital Efficiency Financial Model helps you understand how revenue growth translates into profitability and cash — and how working capital requirements impact capital efficiency as you scale.
This integrated financial model connects the income statement, balance sheet, and cash flow statement in a single, dynamic view. As revenue grows or contracts, the model automatically reflects the downstream effects on margins, inventory, payables, and cash flow, giving you a clear picture of true capital needs.
You can customize core assumptions directly in the model, including revenue growth rates, gross margins, operating expenses, and working capital drivers. This allows you to see how changes in pricing, cost structure, or payment terms affect profitability, cash flow, and capital efficiency over time.
The model also makes the cash conversion cycle explicit, helping you understand how long capital is tied up in inventory and operations, and how accounts payable offset those needs. This is especially valuable for businesses where rapid growth can strain cash despite strong reported profits.
What the Model Includes
Income statement:
Track monthly revenue growth, cost of goods sold, gross margin, operating expenses, and net income to understand profitability trends as the business scales.
Balance sheet:
Monitor cash, inventory, accounts payable, and equity over time, with a direct link between operating performance, working capital, and capital requirements.
Cash flow statement:
See how net income converts into operating cash flow, including the impact of inventory investment, accounts payable timing, and changes in working capital.
Working capital drivers:
Analyze days inventory outstanding (DIO), days payable outstanding (DPO), days sales outstanding (DSO), and the resulting cash conversion cycle to identify opportunities to improve capital efficiency and free up cash.
Scenario-ready structure:
Adjust revenue growth, margins, and working capital assumptions to model different operating scenarios, forecast cash needs, and stress-test capital efficiency under various growth strategies.