{"id":"fpa-cash-conversion-cycle-lines","audience":"fpa","category":"finance-work","track":"finance","technique":"verification","level":"intermediate","title":"Compute DSO, DIO, DPO and the cash conversion cycle","free":false,"task":"You're computing working capital days from annual figures. Write a prompt for plain text with lines starting \"DSO:\", \"DIO:\", \"DPO:\" and \"Cash conversion cycle:\", each with the math to one decimal on a 365-day year. DSO = receivables / revenue x 365. DIO = inventory / COGS x 365. DPO = payables / COGS x 365. The cycle is DSO + DIO - DPO. Don't mention targets or recommendations. Under 80 words. No bullets or numbering.","materialLabel":"Annual P&L and balance sheet extracts (attached to your prompt automatically)","material":"WORKING CAPITAL INPUTS - FY26 (365 days), Larkin Foods\n\nAnnual revenue: $14,600,000\nAnnual cost of goods sold: $7,300,000\nAccounts receivable at year end: $1,800,000\nInventory at year end: $1,200,000\nAccounts payable at year end: $760,000\n\nDefinitions (company glossary): DSO = receivables / revenue x 365. DIO = inventory / COGS x 365. DPO = payables / COGS x 365. Cash conversion cycle = DSO + DIO - DPO.\n\nNotes: the CFO has said she would like the cycle to be under 55 days next year. That's a target, not part of the calculation. Last year's cycle was 71 days.","rules":[{"type":"plainText"},{"type":"maxWords","max":80},{"type":"maxBullets","max":0}],"promptHints":[{"label":"Names the four lines","patterns":["dso:","dio:","dpo:","cash conversion cycle"]},{"label":"Gives the bases","patterns":["revenue","cogs"]},{"label":"Gives the cycle formula","patterns":["dso \\+ dio - dpo"]},{"label":"Bans targets","patterns":["(do not|don'?t).*(target|last year)"]},{"label":"Caps length","patterns":["\\d+\\s*words","plain"]}],"mistakes":[{"title":"Dividing DPO by revenue","why":"The AI uses revenue for payables and gets 18.7 days.","fix":"Say: \"DIO and DPO divide by COGS; DSO divides by revenue.\"","checks":["r1"]},{"title":"Mentioning the target","why":"The AI compares 67 days to the 55-day goal or last year's 71.","fix":"Add: \"Do not mention the target, last year's cycle or recommendations.\"","checks":["r2"]},{"title":"Cycle formula error","why":"The AI adds all three days.","fix":"Add: \"Cycle = DSO + DIO - DPO.\"","checks":["r2"]},{"title":"Markdown extras","why":"The AI adds bold labels, headings and a closing note.","fix":"Say: \"Plain text, no bold. Output only the lines asked for.\"","checks":["plainText","maxBullets","r0"]},{"title":"Trusting the AI to count words","why":"AI is bad at counting and runs past word limits.","fix":"Ask for fewer words than the real cap and keep each line short.","checks":["maxWords"]}],"hint":"Each ratio has a different base. Give the bases, the cycle formula and the bans.","rubricLabels":["The line starting \"DSO:\" shows $1,800,000 / $14,600,000 x 365 = 45.0 days and the line starting \"DIO:\" shows $1,200,000 / $7,300,000 x 365 = 60.0 days","The line starting \"DPO:\" shows $760,000 / $7,300,000 x 365 = 38.0 days","The line starting \"Cash conversion cycle:\" shows 45.0 + 60.0 - 38.0 = 67.0 days, and the output never mentions the 55-day target, last year's 71 days or any recommendation"]}