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calculating CHANGE in N.W.C , why monthly and not annual?

Question: in PACKAGE 2 "Basic FM and DCF"...........Free Cash Flow Calculation "video" why was the Change in NWC calculated on a monthly basis and not on annual basis (cell I14, tab: DCF (simple) in HRH Model Template) taking into consideration that the column is for the w... Read More

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by Guest 1.

added 11 years ago

Re: calculating CHANGE in N.W.C , why monthly and not annual?

Good question! It is common convention to estimate working capital requirements for a service-based business, like insurance brokers or asset managers, to be 30 or 60 days of expenses (primarily to cover 1-2 months of salaries). As such, the change in working capital calculated as the difference fr... Read More

by WST Expert 1.

added 11 years ago

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