Working Capital Forecasts

Working capital forecasts means to estimate the value of working capital in one year. Following are main items which are estimated in working capital forecasts.

1. Future Operating Costs

We estimated our future operating cost, more future operating cost means more need of cash and cash is the part of working capital. It means, we need more working capital in that situation. For estimating this, w analyze past income statements of company.

2. Forecast Revenue Growth 

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

3. Changes of Working Capital 

To analyze the past working capital changes is useful for working capital future forecast. Working capital is difference between current assets and current liabilities. If we check two years' working capital changes, we can estimate what changes in working capital in next year.

Related : Working Capital Management 

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