Therefore, the impact on the company’s free cash flow (FCF) is +$2 million across both periods. From Year 0 to Year 2, the company’s NWC reduced from $10 million to $6 million, reflecting less liquidity (and more credit risk). The articles and research support materials available on this site are educational and are not intended […]
Net Working Capital: Definition, Formula, Uses
For example, for a company that has non-current investment securities, there is typically a secondary market for the relatively quick conversion of all or a high portion of these items to cash. Also, unused committed lines of credit—usually mentioned in a note to the financials on debt or in the management discussion and analysis section […]