Operating Working Capital Flashcards
1
Q
Calculation of Operating Working Capital
A
Receivables
+ Contract Assets
+ Inventories
-Trade payables
-Contract Liabilities
=OWC
2
Q
Cash Conversion Rate - Calculation
A
OWC / Revenue * 365
Measures how many days liquid assets are tied up in the OWC
3
Q
Days Sales Outstanding - calculation
A
Receivables / Revenue * 365
4
Q
Cash Conversion Cycle - Calculation
A
Days Sales outstanding
+ Days Inv outstandig
- Days payable outstanding
5
Q
ROCE - Calculation
A
Profit / Net Capital employed
6
Q
EVA - Calculation
A
EVA = NOPAT - WACC* Net Capital employed
7
Q
Free Cashflow - Calculation
A
Profit +- Change in OWC
= Cash Flow Operating activity
