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One page, every week, beside the forecast. Each number has a definition, and each one catches a different way cash goes missing.
The forecast shows where cash is going. The scorecard shows why. One page, on screen right after the forecast.
| Number | Defined as | What it catches |
|---|---|---|
| Lowest forecast week | The lowest ending cash in the next 13 weeks, and its gap to the floor | A squeeze while there’s time to act |
| Forecast accuracy | Actual cash against the forecast made four weeks earlier, for the last four weeks | A forecast nobody should trust |
| Cash conversion cycle | By product family, from the tool in chapter 3, updated when a purchase order or terms change | Drift in shelf days or supplier timing |
| Weeks of cover | Stock on hand and on order, by product, divided by the average weekly units sold over the last four weeks | Stock bought for demand that hasn’t come |
| Slow stock | Share of inventory value in products with more than 26 weeks of cover | Cash that will come back late, or at a markdown |
| Open commitments | Unpaid purchase order balances, in dollars and in weeks of current sales | Orders placed on a forecast that has since changed |
| Payout lag and holds | Average days from sale to bank, and funds held, by processor | A new reserve or hold before it becomes a cash hole |
| Float owed | Outstanding gift cards, store credit, prepaid plans and unshipped preorders, against cash on hand | Customers’ money being spent as if it were yours |
| Preorders at risk | Preorder units whose promised date is within four weeks and not yet confirmed by the supplier | A delay notice you’ll need soon |
| Repeat share of cash | Cash from returning customers’ orders over all order cash, last four weeks | Growth that’s becoming more expensive to fund |
| Financing headroom | Undrawn credit available today | How much room you have if the forecast is wrong |
A cash number without its date is a guess about the past.
First, no revenue figure appears on it; when revenue sits next to cash, the meeting talks about revenue. Second, every float number sits next to the cash it’s owed from. An $80,000 gift card balance means one thing with $400,000 in the bank and another with $120,000.
Read weeks of cover with open commitments: 10 weeks on hand and 30 on order is a problem even if today looks fine. And read forecast accuracy first. If it’s off by more than 10% most weeks, fix the forecast before deciding anything from it.
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If this is your store
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Written by Andrew Lauchner, a growth and retention operator for consumer brands. The paid work is one ninety-day Sprint.
This is one chapter of Cash Before Growth, which is free and readable in full on a single page with no form in front of it.