Simplified Working Capital Using Assumptions (Helpful)

December 11, 2013

 

Part – 4

In our last tutorial, we have understood detailed calculations of FCFF. In this article we will learn to projection of working capital using assumptions.

Step 2 – Projection of working capital using simple assumptions

Projection of working capital

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Working Capital Projection Solutions

Working Capital Projection

(For a better view of the above picture, click at the picture)

Step 3: Calculate Free Cash Flows using the EBIT Formula

Free Cash Flows using EBIT Formula

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Forecast of FCFF

 Free Cash Flow to Firm Forecast

(For a better view of the above picture, click at the picture)

What Next

We learnt about Projection of working capital using simple assumption in this article. Next we will look at terminal Value. Till then, Happy Learning!

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