What is Days Working Capital?

Days Working Capital in the context of construction refers to the number of days it takes for a construction company to convert its working capital into revenue. This metric is crucial in determining the efficiency of a construction business in managing its cash flow and ensuring that it has enough liquidity to cover its operational expenses. A lower number of days working capital indicates that a company is able to quickly turn its investments into revenue, which is essential for sustaining and growing the business.In the construction industry, where projects can last for months or even years, managing working capital effectively is vital. A construction company needs to have enough cash on hand to pay for materials, labor, and other expenses throughout the duration of a project. By tracking and analyzing days working capital, construction companies can identify