Separate current assets and current liabilities into two sections. Under sales and cost of goods sold, lay out the relevant balance sheet accounts.
#WORKING CAPITAL TURNOVER DRIVERS#
These will be used later to calculate drivers to forecast the working capital accounts. Setting up a Net Working Capital Scheduleīelow are the steps an analyst would take to forecast NWC using a schedule in Excel.Īt the very top of the working capital schedule, reference sales and cost of goods sold from the income statement for all relevant periods.
Download the Free TemplateĮnter your name and email in the form below and download the free template now! Learn more in CFI’s Financial Analyst Training Program. The first formula above is the broadest (as it includes all accounts), the second formula is more narrow, and the last formula is the most narrow (as it only includes three accounts). NWC = Accounts Receivable + Inventory – Accounts Payable Net Working Capital = Current Assets (less cash) – Current Liabilities (less debt) Net Working Capital = Current Assets – Current Liabilities There are a few different methods for calculating net working capital, depending on what an analyst wants to include or exclude from the value.
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