PART 2 Flashcards

Investment Policy and NWC,DPO,DSI,DSO

1
Q

CAPEX > Depreciation

A

Company is in investment phase

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2
Q

CAPEX = Depreciation

A

Company is maintaining its capacity

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3
Q

CAPEX < Depreciation

A

Company is divesting

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4
Q

Net Working Capital

A

= Receivables + Inventories – Payables +/- Accruals

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5
Q

NWC Turnover Ratio

A

= NWC365 / Annual Sales(1+VAT)

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6
Q

DPO

A

= Account Payables*365 / COGS

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7
Q

DSI

A

= Inventories*365 / COGS

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8
Q

DSO

A

= Inventories*365 / Annual Sales

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