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Home Finance Finance Resources Valuation Basics Resources Working Capital Projections
 

Working Capital Projections

Madhuri Thakur
Article byMadhuri Thakur

Updated October 5, 2023

Working Capital Projections

 

 

What are Working Capital Projections?

Working capital projections are the estimated financial figures forecasting the expected changes in a company’s working capital over a specific period. Working capital represents the difference between a company’s assets and liabilities. It indicates the company’s ability to cover its short-term obligations and fund its day-to-day operations.

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Step 1 – Using Simple Assumptions

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Working Capital Projection Solutions

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Step 2: Calculate Free Cash Flows using the EBIT Formula

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Forecast of FCFF

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What Next

We learned about working capital projections using simple assumptions in this article. Next, we will look at terminal value. Till then, Happy Learning!

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