Working capital requirement (BFR)
Capital tied up in the operating cycle: trade receivables and inventory minus trade payables. Positive BFR means the company funds its own cycle; negative BFR means it is funded by its suppliers.
In practice
BFR is often the first source of cash crisis in fast-growing companies: doubling revenue mechanically doubles BFR if commercial terms remain unchanged. A company with 60-day customer payment terms and 30-day supplier terms consumes roughly 8% of annual revenue in additional BFR for every 10% of growth. Negotiating supplier payment terms and using invoice factoring are the priority levers before seeking more expensive financing.