> ## Documentation Index
> Fetch the complete documentation index at: https://docs.amlok.io/llms.txt
> Use this file to discover all available pages before exploring further.

# Working capital benchmarks

> Evaluate operating liquidity, cash-conversion timing and short-term financing exposure.

Use a business and a defined operating cycle as the assessment unit. Separate a temporary timing gap from persistent negative operating cash flow. Preserve seasonality and the contractual maturity of the financing.

## Financial-risk measures

| Measure | Definition and comparison rule |
| - | - |
| Cash-conversion cycle | Receivable days plus inventory days minus payable days, using consistent flow and average-balance periods. |
| Collection timing | Days from invoice or contractual due date to payment, with unpaid invoices retained as censored observations. |
| Payables pressure | Supported overdue obligations and their aging, excluding valid credits or disputed items as defined. |
| Liquidity headroom | Available cash and valid undrawn funding against supported near-term cash needs. |
| Financing dependence | Frequency and amount of new funding needed to cover operating shortfalls, with internal transfers excluded. |

Do not compute inventory days for a service business without inventory or compare its cycle directly with a retailer's. Identify whether receivable days use credit sales or total revenue.

## Public benchmark sources

[ISED's 2024 credit-condition report](https://www.ised-isde.canada.ca/site/sme-research-statistics/en/small-business-credit-condition-trends-2014-2024) identifies working or operating capital as the intended use for **49%** of debt-financing borrowers in its survey. This describes financing purpose, not an acceptable liquidity ratio or default rate.

Match operating-cycle benchmarks to industry, business size and season. The [AMLOK public-record inventory](https://docs.amlok.io/research/datasets.md) includes financial facts and financing observations, but invoice-level collection timing requires a suitable ledger with payment links and sufficient follow-up.

## AMLOK evaluation

Test aging-bucket accuracy, invoice and payment reconciliation, forecast error and cash-gap identification. Use an as-of snapshot so later payment dates and backfilled accounting entries do not leak into the decision inputs.

For Signal, measure confirmed liquidity changes, false alerts per business-month and warning lead time against a defined funding or payment event. Compare a seasonal baseline with the evaluated model on the same business-periods. Report uncertainty when ledger or payment coverage is incomplete.

Follow the [financial analysis protocol](https://docs.amlok.io/research/financial-analysis.md) and [common benchmark contract](https://docs.amlok.io/research/industries/index.md#benchmark-contract).


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