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Analyze Working Capital & Cash Conversion Cycle: AI Prompt for Claude & ChatGPT

Copy this Claude prompt to analyze working capital and the cash conversion cycle for stock research. Works with Claude, ChatGPT, Gemini, and Grok.

This AI prompt for stock research computes DSO, DIO, DPO, and the cash impact of working-capital swings. Copy it into Claude, ChatGPT, Gemini, or Grok with balance-sheet lines and peer context from filings.

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Gemini

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The Analyze Working Capital & Cash Conversion Cycle prompt (Claude, ChatGPT, Gemini, Grok)

Select a watchlist or portfolio ticker to pre-fill placeholders, or copy and replace manually.

You are a senior analyst focused on operating efficiency and cash generation in [SECTOR]. Analyze the working capital and cash conversion cycle of [COMPANY_NAME] (ticker: [TICKER]) over the past [N_YEARS] fiscal years.

## Context
Use 10-K/10-Q data only. No investment recommendations. Show formulas and cite the line items used.

## Required Analysis

### Part 1 - Component Trend Table
For each fiscal year, compute and tabulate:
| Fiscal Year | DSO (days) | DIO (days) | DPO (days) | Cash Conversion Cycle (CCC) |
- DSO = average receivables / revenue x 365
- DIO = average inventory / COGS x 365
- DPO = average payables / COGS x 365
- CCC = DSO + DIO - DPO

### Part 2 - Trend & Seasonality
- Describe the CCC trend (improving, stable, deteriorating) and quantify the change in days.
- Note any intra-year seasonality visible in 10-Q data.
- Identify which component (receivables, inventory, payables) is driving the change.

### Part 3 - Cash Impact Quantification
- Translate the change in CCC into a dollar cash impact: (change in CCC days / 365) x revenue.
- Assess whether working capital is a net source or drain of cash each year and quantify it from the cash flow statement.

### Part 4 - Efficiency & Peer Context
- Express working capital as a percent of revenue over time.
- Compare DSO/DIO/DPO to 2-3 named peers if data is available and comment on relative efficiency.

### Part 5 - Quality & Risk Read
- Is inventory building faster than sales (obsolescence risk)?
- Is DPO stretching in a way that could strain supplier relationships or signal liquidity pressure?
- Rate overall working-capital management (1-5) with a one-line justification.

### Part 6 - Follow-Up Research Questions
List 3-5 specific questions to investigate next.

### Part 7 - Visual Verification & Chart Follow-Up
- Identify 2-3 visual inflection points that require multi-year chart inspection (e.g. multi-year CCC day trends, inventory build vs revenue growth, and working capital cash drain).
- Provide the direct Chartloom visual research link for the user to inspect these 10-year interactive charts: https://www.chartloom.com/c/ticker/[TICKER]

## Output Format
Headers, tables, bullets. Neutral, research-oriented - no buy/sell/hold language, no price targets.

**Variables:** If any [BRACKETED] placeholders above are not set, ask the user for each missing value before proceeding.

Variables

Replace these placeholders in the prompt with your own values.

Placeholder	Description	Example
[COMPANY_NAME]	Full legal or common company name.	Walmart Inc.
[TICKER]	Stock ticker symbol.	WMT
[SECTOR]	Sector for efficiency benchmarking.	Retail
[N_YEARS]	Number of fiscal years to analyze.	5

How to use this prompt

Paste the balance sheet and income statement lines (receivables, inventory, payables, revenue, COGS) into the chat. Replace the bracketed variables. Use average balances where possible, and check the CCC trend against the working-capital line in the cash flow statement.

Tips

A shrinking cash conversion cycle frees up cash; a lengthening one quietly consumes it even when profits look fine.
Inventory growing faster than sales is an early warning of demand softening or obsolescence.
Stretching DPO flatters cash flow short-term but can strain suppliers - check whether it is sustainable.
Working capital swings are often seasonal; use 10-Q data to avoid misreading a single quarter.
Translate day changes into dollars - it makes the cash impact tangible for a research memo.

When to use this prompt

Understanding why a profitable company generates weak operating cash flow

Detecting inventory or receivables build-ups before they hit earnings

Comparing operating efficiency across retailers or manufacturers

Supporting a free-cash-flow or liquidity analysis with working-capital detail

Updated 2026-07-08

These prompts are research tools, not financial advice. Outputs should be independently verified. They are not a recommendation to buy, sell, or hold any security. See our disclaimer for more information.

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