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Net Working Capital

The document outlines key financial formulas related to net working capital (NWC), including the relationship between NWC, fixed assets, long-term liabilities, and equity. It also details the operating cycle and cash cycle calculations, incorporating inventory and accounts receivable periods. Additionally, it presents a collection schedule over three months with specific sales and balances.

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ahsanhasnain2834
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5 views1 page

Net Working Capital

The document outlines key financial formulas related to net working capital (NWC), including the relationship between NWC, fixed assets, long-term liabilities, and equity. It also details the operating cycle and cash cycle calculations, incorporating inventory and accounts receivable periods. Additionally, it presents a collection schedule over three months with specific sales and balances.

Uploaded by

ahsanhasnain2834
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Net working capital

NWC+Fixed Assets= Longterm liabilities + Equity

Operating cycle=Inventory PERIOD (days)+AR Period (days)

Cash Cycle = operating cycle - AP Period (days)

Collection Collection
Collection in in 2nd in 3rd
Month Sale 1 month Balance month Balance month
1 6700 2233.3333 4466.667 4466.667 0 0
2 7900 2633.333 5266.667 5266.667
3 9100 3033.333
7100 8300

3500=opening+6900-7300

3900

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