Brewery cash flow is driven by a handful of controllable factors.
This post breaks down the six core drivers of brewery cash flow and the key ratios that reveal where cash is being created, tied up, or drained so you can take action before cash becomes a problem.
- Net Operating Income (NOI): Are operations generating cash?
Key ratios: Net Operating Income (NOI) %, or Earnings Before Interest Taxes Depreciation and Amortization, EBITDA %
Strong NOI creates cash; weak NOI forces breweries to rely on debt or owner funding just to stay afloat. - Inventory: How long is cash sitting on the floor?
Key ratios: Inventory turnover, days on hand (DOH)
Excess raw materials, slow-moving SKUs, and overproduction lock up cash and lengthen the cash cycle. - Accounts Receivable (AR): How fast do you get paid?
Key ratios: Days sales outstanding (DSO), AR turnover
Slow distributor payments and loose credit terms delay cash collection and increase cash flow risk. - Accounts Payable (AP): How fast do you pay vendors?
Key ratios: Days payable outstanding (DPO), AP turnover
Paying vendors too quickly shortens your cash runway, while strategic payment timing improves liquidity. - Capital Expenditures (Capex): How growth impacts cash
Key ratios: Capex-to-sales, free cash flow
Equipment purchases and expansions can strain cash if not planned and timed properly. - Debt: How much cash goes to lenders every month?
Key ratios: Debt service coverage ratio (DSCR), leverage ratios
Principal and interest payments reduce flexibility and can quickly turn a profitable brewery into a cash-starved one.
Do This Next…
- Watch the short explainer video below – Key Drivers of Cash Flow
- Get the Brewery Profit Brief – weekly tips to run a more profitable brewery
