Projecting Net Working Capital For Free Cash Flow Calculation, DCF Model Insights

Hi! Thanks for the video! May I ask you what method would be the most applicable for financial companies such as banks and investment firms? Calculating DIH in this case does not really make sense. Are there any replacements for such cases?

Well explained!

u r not the best
poor video

You're a beast!! well done...

Is there any possibility to contact (through email or specific page you own) you regarding an issue I am facing while forecasting the inventories?

One thing that is unclear in this video is whether the changes in working capital should include the impact of "interest payable" in the unlevered free cash flow DCF. "Interest payable" would seem to fall within your general category of "non-interest bearing current liabilities," which should be excluded for the net cash flows here. But it's unclear if "interest payable" should be excluded as well.

How can I calculate de NCWC in perpetuity?

Very good instructional video content. One critique....for DPO why would you say that paying your suppliers sooner is "good". If you are looking to increase NWC, you would want to drive up DPO (assuming no impact on COGS) and increase AP, not pay it down sooner. Provided you have a high percentage of on time payment, extending terms improves NWC all other inputs held constant.

Hello there finance kid! Just a quick question, do I always subtract the change in nwc in the fcff calculations whether it's negative or positive?

This is by far the best video on projecting working capital. Good stuff