Financial modelling: Working capital 

By Brett Vandepol

Thursday 11th May 2023

By Brett Vandepol

Working capital if often overlooked but can have a significant impact on your project cash flows and needs to be incorporated in any comprehensive analysis. It is essential that it is modelled accurately and correctly to avoid any nasty surprises in the future. This webinar will guide you through the concept of working capital, where it arises and how it can impact your financial statements. Through a worked example you will gain an appreciation of best practise techniques for modelling working capital, how to apply the ‘average balance’ approach and identify the key lines for your financial statements.

Learning points:

  • Introduction to the concept of working capital and where this can arise
  • Appreciation of the impact working capital can have not just do your cashflows but your balance sheet
  • Discussion on various methods for calculating working capital and a demonstration on the ‘average balance’ approach using debtor and creditor day assumptions
  • Understand the major impact working capital can have on your cash flows
  • Learn how to manage working capital with ‘corkscrew’ accounts and use these to easily identify the key lines for your financial statements