does this make sense?
If a business had no recievables (everything is sold via cash or credit card), all else equal, if revenues grow, then NWC should decrease right?
Trending Content - Investment Banking Forum
| +160 | UBS Tech layoff | 52 | 1d |
| +149 | Analyst: Why is UBS IB doing worse than peers?, UBS CFO: No Comment | 24 | 7h |
| +146 | UBS’s M&A BANKERS ARE DOING TERRIBLY. $200M EXTRA IS BEING CUT | 31 | 10h |
| +63 | Leaked Interview Questions to Recruiting Services | 36 | 1h |
| +59 | Are target prospects getting dumber? | 27 | 8h |
| +58 | How do YOU manage networking requests? | 17 | 15h |
| +37 | Quitting After First 4 months | 12 | 1d |
| +34 | MBB Pay Raises | 26 | 1d |
| +19 | Rothschild UK - Mining & Healthcare 2026 | 5 | 3d |
| +19 | Career Crossroads | 2 | 2d |
Career Resources
...assuming the journal entry the journal entry is: Debit Cash Credit Inventory Debit COGS Credit Sales Revenue/Retained Earnings
By my logic, NWC should increase by the profit of revenue (increases cash on B/S) over COGS (decreases inventory on B/S)
But do I bankers care about NWC? I thought the concept was just thought of as working capital in general, without regard to the "net" derived by subtrating liabilities from assets...but I'm just guessing there..
Yes, bankers care about this number. In M&A transaction / restructuring this can be a factor. (Do not have time to explain this in detail)
^I'm NOT an accountant, ha. Did well in my accounting classes, though. Just wanted to go with the JE format to be extra-explicit.
Illum odio explicabo atque enim velit tempora. Et quo sit commodi suscipit nesciunt sint. Quis dolorum repellat quia minus. Error eaque occaecati molestiae et accusantium provident aut assumenda. Id atque impedit totam qui consequatur doloribus et.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...