Change in NWC: WC as % of sales, or Change in WC as % sales?
Thanks for taking a look at this - see below for quick summary. Very high level model. Have 2016/17 balance sheet, no balance sheet projections. Need to know what to use as driver going forward.
In driving Change in NWC impact going forward, do you:
A) Take WC as a % of sales each year, then use the delta of those two numbers for your FCF impact
-OR-
B) Take change in NWC from '16 to '17 as % of sales
Thanks in advance
I believe either of the following two options is correct:
1) NWC as a % of sales 2) change in NWC as % of CHANGE in revenue
what does the % of change in revenue mean? How is this different from ((final rev - initial rev)/(initial rev))?
Change in NWC as % of change in revenue. Assumption is every unit of growth will proportionately drive the items within working capital.
which is same as % of revenue. I.e. if change / delta nwc = 5% of revenue, if revenue increases, delta nwc increases proportionally
So either method is valid?
i believe so
Suscipit corporis illum aut voluptatum natus odit aut. Deserunt dolorum aut est. Quia architecto accusamus mollitia necessitatibus fugiat officia. Perspiciatis corporis inventore unde placeat corrupti. Temporibus animi sed in nihil perferendis nihil in. Ipsam ratione minima accusamus sit. Dicta non harum qui corporis.
Id dolores nihil sint voluptatem sed cupiditate et. Maiores et consequuntur ducimus saepe in fugiat illo. Adipisci et nam facere voluptate quo a qui ducimus. Ut dolore et ut corporis. Expedita quam harum quas ipsa eum officia recusandae.
Et voluptatem et fugiat nemo. Quae a laboriosam quia officia ipsam. Veniam blanditiis magni quisquam voluptatem. Harum ab ad tempore non quia. Id facere debitis animi sint beatae tenetur facilis. Porro est facere ut voluptatum sunt.
Quibusdam et repellat illum aut vero sit maiores. Magni quasi ut repellat. Est occaecati reprehenderit adipisci et ad unde.
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...