Part 4 – Working Capital
Fluctuations in Working Capital can be the source of a major disconnect between profits and cash flow. This article covers how to analyze what has happened in the past, and how to use that knowledge to forecast Working Capital in the future.
In this section of the model, you’ll find out just how sensitive your cash is to your ability to collect receivables and control inventory turnover.
You can forecast Accounts Receivable (A/R) based on Days Sales Outstanding, or override the forecast in any month with a dollar amount.
The same is true for Inventory and Accounts Payable.
The first step is to see how you have performed in the past.
History