What pushes the gap wider
- Aggressive revenue recognition under ASC 606[ASC 606] (booked revenue that has not yet collected).
- Channel stuffing inflating receivables.
- Capitalising costs that competitors expense.
- Holding back vendor payments to defer cash outflows past quarter-end.
When above 1.0 is good vs. bad
Good: working-capital release in a deleveraging year; deferred revenue building on subscription billings. Bad: liquidating inventory or stretching payables to flatter the period.