August 2026 Issue · Published August 25, 2026 · Monthly

DFW SMB Cash Flow Index

Name: DFW SMB Cash Flow Index
Creator: Local Fractional
License: https://localfractional.com/image-license

A monthly working-capital read on Dallas-Fort Worth small and mid-market businesses: DSO, current ratio, cash conversion cycle, and working capital as a share of revenue, segmented by industry and tracked month by month since January 2026.

August 2026 · Headline

Summer split the Metroplex: HVAC and plumbing built cash through peak season, roofing and manufacturing are carrying more of it, and services kept stretching.

Eight months in, the trend lines are clear. HVAC ended August with a shorter cycle than it started the year; plumbing held flat. Roofing absorbed a heavy spring hail season and is only now working the receivables down. Manufacturing's cash conversion cycle climbed from 78 to 88 days and has held there since July. Professional services and electrical contractors are still watching commercial clients stretch terms.

By Chris Gauvin and Taber Wetz

What is the DFW SMB Cash Flow Index?

Most published cash flow benchmarks come from public-company filings or national survey data. Neither reflects what a $5M HVAC company in Plano or a $20M tier-2 manufacturer in Fort Worth actually looks like on a Tuesday morning.

The DFW SMB Cash Flow Index is a monthly, DFW-specific working-capital read produced by Local Fractional. Every issue carries the full year-to-date series, so you can see where each industry is and how it got there. The four metrics are the ones that matter most at our scale:

Days Sales Outstanding (DSO): how quickly invoices turn into cash.
Current Ratio: short-term liquidity; the first check most lenders run.
Cash Conversion Cycle (CCC): how long a dollar of revenue is tied up in the operating cycle.
Working Capital as % of Revenue: a size-normalized measure of capital efficiency.

Output is aggregated and directional. It is designed to help an owner or operator answer one question: "Are my numbers where they should be, given the industry I'm in and the month we're in?"

Industries covered

The index reports benchmarks for the industries we serve in DFW where we have a defensible sample size:

HVAC Plumbing Electrical Roofing Manufacturing CPG SaaS & Tech Professional Services

Methodology

The index is a proprietary monthly read on Dallas-Fort Worth small and mid-market cash-flow conditions. It blends what we see on the ground across Local Fractional client engagements with a curated set of public and industry-benchmark inputs, weighted for DFW regional conditions. Each month's value is the trailing-quarter read as of that month, which smooths single-month noise without hiding a trend.

Focus: Privately-held operating businesses in the DFW metroplex, $1M–$50M revenue.
Segmentation: Eight industry buckets aligned to the sectors we serve.
Outputs: A monthly LF median for each industry from January 2026 forward, the current DFW range, year-to-date direction, and a monthly narrative.
Privacy: No single client or operator can be identified from the published output. Underlying inputs are aggregated; any segment that would risk identifiability is rolled up or omitted.
Cadence: Published monthly. The January and April 2026 readings were released as the Q1 and Q2 quarterly issues, which remain in the archive below; the series has been carried monthly since.
Intent: A directional tool for operators to self-assess against peers. Not audit-grade; not a substitute for professional accounting, legal, or investment advice.

The specific weighting, source-mix, and calculation conventions are Local Fractional's proprietary methodology and are not published.

August 2026 — What we're seeing in DFW

The story so far

January: DFW operators closed 2025 with working-capital discipline mostly intact. Manufacturing showed the first signs of a longer cycle.
April: Tightening turned uneven. Trades held, manufacturing kept lengthening, services split by end market.
August: Summer sorted the winners. HVAC and plumbing built cash in peak season, roofing carried a hail-season receivables bulge, manufacturing's cycle stopped climbing at 88 days, and services kept stretching. Each of those threads is picked up below.

Three themes define the working-capital picture for Dallas-Fort Worth operators as summer closes out.

1. Peak season did its job for HVAC and plumbing; roofing is still digesting hail

A hot summer and steady residential demand pulled HVAC's median DSO from 38 days in January to 36 in June and July, with a normal tick back to 37 as August commercial jobs closed. Plumbing tracked the same shape at a smaller amplitude and finished August exactly where it started the year. HVAC picked up a tick of current ratio and a day off its cash conversion cycle along the way. Roofing went the other way. Three hail events between April 18 and May 9 hit Tarrant and Denton counties, insurance-funded work surged, and carriers took their time on claims. Roofing DSO ran from 44 days in January to 54 in July before easing to 53 in August. Operators with a large storm book should be reconciling open claims weekly and pricing the carry into their supplement strategy.

2. Manufacturing's cycle has stopped climbing, but it has not come down

Tier-2 and tier-3 manufacturers across DFW lengthened their cash conversion cycle every month from January (78 days) through July (88 days), driven by defensive inventory on imported components and slower commercial collections. August printed 88 again. That is the first month without deterioration this year, and it is worth watching, but a plateau at 88 days with a current ratio of 1.9 is not a healthy resting point. The operators making progress are the ones converting stale SKUs and pushing non-strategic supplier terms out rather than waiting for demand to solve it.

3. Services and commercial electrical keep stretching

Professional services firms tied to real estate, construction, and legal M&A have added a day of DSO almost every month since January, from 50 to 57. Electrical contractors with heavy general-contractor exposure show the same pattern, from 58 to 64. In both cases the cause is the same: clients are stretching terms and the operator is accepting them. SaaS and technology businesses with annual prepays remain the outlier, holding a negative cash conversion cycle all year. End-market still matters more than the industry label.

Macro Backdrop

The national small-business mood improved through the summer. The NFIB Small Business Optimism Index rose 2.4 points in July to 99.8, above its 52-year average of 98.0 and the highest reading since August 2025. A seasonally adjusted 20% of owners plan to add jobs in the next three months, the strongest hiring intent since October 2022. The catch is what sits underneath it: the NFIB Uncertainty Index climbed to 91 against a historical average of 68, and 27% of owners named labor quality or availability as their single most important problem. Translation for DFW: demand and hiring plans are up, wages and uncertainty are up with them, and the working-capital discipline that got operators through the spring is still the lever heading into the fourth quarter.

Monthly Benchmarks — January to August 2026

Local Fractional's aggregate read by month, segmented by industry. Each cell is the LF Median: our central estimate for a representative DFW operator as of that month. The "Aug Range" column is the observed band across the DFW small and mid-market operator set for the current month. "Since Jan" shows whether the median has risen (↑), fallen (↓), or held (↔) from the January reading. Moves of two points or less (0.1 on the current ratio) count as held.

Swipe the tables sideways to see every month →

Days Sales Outstanding (DSO) — days

LF median by month, January to August 2026. Lower is better. Residential/commercial mix drives most variance within an industry.

Industry	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Aug Range	Since Jan
HVAC	38	38	38	38	37	36	36	37	25–55	↔
Plumbing	34	34	34	34	34	33	33	34	22–50	↔
Electrical	58	59	61	62	63	63	64	64	45–82	↑
Roofing	44	45	47	48	51	53	54	53	32–80	↑
Manufacturing	52	53	55	56	57	58	58	58	46–72	↑
CPG	47	47	47	47	48	48	49	49	35–62	↔
SaaS & Tech	42	42	42	42	42	41	41	41	30–55	↔
Professional Services	50	51	53	54	55	56	56	57	42–72	↑

Current Ratio

Current assets ÷ current liabilities. 1.5–2.0 is the textbook healthy band; SaaS often sits higher due to deferred revenue dynamics.

Industry	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Aug Range	Since Jan
HVAC	1.7	1.7	1.7	1.7	1.7	1.8	1.8	1.8	1.3–2.3	↔
Plumbing	1.7	1.7	1.7	1.7	1.7	1.7	1.7	1.7	1.3–2.1	↔
Electrical	1.7	1.7	1.6	1.6	1.6	1.6	1.5	1.5	1.2–1.9	↓
Roofing	1.6	1.6	1.6	1.6	1.6	1.5	1.5	1.5	1.1–1.9	↔
Manufacturing	2.1	2.1	2.0	2.0	2.0	1.9	1.9	1.9	1.4–2.4	↓
CPG	1.7	1.7	1.7	1.7	1.7	1.7	1.6	1.6	1.3–2.0	↔
SaaS & Tech	2.4	2.4	2.4	2.4	2.4	2.4	2.4	2.4	1.8–3.5	↔
Professional Services	1.8	1.8	1.7	1.7	1.7	1.7	1.6	1.6	1.2–2.1	↓

Cash Conversion Cycle (CCC) — days

DSO + DIO − DPO. Lower is better; SaaS frequently prints near-zero or negative thanks to annual prepays.

Industry	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Aug Range	Since Jan
HVAC	17	17	17	17	16	15	15	16	5–30	↔
Plumbing	15	15	15	15	15	14	14	15	5–28	↔
Electrical	34	35	37	38	39	39	40	40	22–62	↑
Roofing	27	28	29	30	33	35	36	35	18–60	↑
Manufacturing	78	80	82	84	86	87	88	88	64–115	↑
CPG	74	74	74	74	75	76	77	77	56–102	↑
SaaS & Tech	−4	−4	−4	−4	−5	−5	−5	−5	−30–20	↔
Professional Services	38	39	41	42	43	44	44	45	27–63	↑

Working Capital as % of Revenue

(Current assets − current liabilities) ÷ trailing-12-month revenue. A capital-efficiency proxy that normalizes size.

Industry	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Aug Range	Since Jan
HVAC	10%	10%	10%	10%	10%	10%	11%	11%	6–15%	↔
Plumbing	9%	9%	9%	9%	9%	9%	9%	9%	5–13%	↔
Electrical	12%	12%	13%	13%	13%	14%	14%	14%	8–19%	↔
Roofing	10%	10%	11%	11%	12%	12%	13%	13%	8–18%	↑
Manufacturing	22%	23%	23%	24%	25%	25%	26%	26%	19–34%	↑
CPG	21%	21%	21%	21%	21%	22%	22%	22%	15–29%	↔
SaaS & Tech	2%	2%	2%	2%	2%	2%	2%	2%	−5–10%	↔
Professional Services	12%	12%	13%	13%	13%	14%	14%	14%	8–19%	↔

Values reflect Local Fractional's aggregate view of the DFW small and mid-market operator set as of August 2026. January and April values match the Q1 and Q2 2026 issues. They are directional benchmarks for operator self-assessment, not audit-grade figures. Revenue tier focus: $1M–$50M.

If you're outside the range

Being outside the August band isn't automatically bad, but it's always worth understanding why. Start here:

If your DSO is higher than the DFW range

Aged A/R over 60 days as a % of total: is it rising?
Customer concentration: is one slow payer distorting the whole metric?
Invoicing cadence: weekly, bi-weekly, or end-of-month?
Terms on commercial jobs: are you negotiating them, or accepting customer defaults?

If your CCC is longer than the DFW range

Slow-moving inventory: do you have SKUs that haven't turned in 90+ days?
Payable terms: are you paying faster than you need to on non-strategic vendors?
Deposits and milestone billing: could you be collecting earlier in the job cycle?
Is the cycle lengthening as you grow? Scaling revenue on a longer CCC is the classic growth trap.

Past Issues

The September 2026 reading ships in the last week of September

Each monthly issue adds a column to the series above, with a short "what changed" summary. The Executive Edge Weekly newsletter carries the link the morning it publishes.