Working Capital Forecasts

Working Capital Forecasts:

It means to estimate the value of working capital in 1 year. Below are main items which are estimated in the working capital forecasts:

1. Future Operating Costs:

We predicted our future operating cost, more future operating cost means more requirement of cash and cash is the portion of working capital. It means we require more working capital in that condition. For estimating this, we examine past income statements of the company.

2. Forecast Revenue Growth:

By sales and other revenue's trend analysis, we can forecast the revenue growth. This will tell us, how working capital will administer from revenue in future.

3. Changes of Working Capital:

To examine the past working capital changes is helpful for working capital future forecast. Working capital is the difference among current assets and current liabilities. When we check 2 years working capital changes, we can predict what changes in working capital in the subsequent year.

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