Working Capital Requirements Revisited

Autor:	Carl M. Hubbard, Daniel T. Walz
Rok vydání:	1993
Předmět:	Finance Economics and Econometrics Cash and cash equivalents business.industry General Engineering Net present value Cash flow forecasting Education Operating cash flow Economics Cash flow Cash flow statement Cash on cash return Cash management business
Zdroj:	The Engineering Economist. 38:249-256
ISSN:	1547-2701 0013-791X
Popis:	The conventional approach to considering working capital cash flows in capital budgeting is to omit them or include some ad hoc figures at the initiation and termination of the project. The authors argue for an endogenous system of estimating relevant working capital cash flows on a periodic basis. Otherwise, the present value of working capital cash flows is biased against the project's acceptance. Examples of calculating working capital cash flows as related to changes in annual sales are presented for three time patterns of sales and contrasted to the conventional method. An empirical study of the linear relationship of net working capital and sales revenue of 770 companies is reported, and an alternative cash flow model is offered thai includes working capilal cash flows.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::21463430fb45e14d84f051d9f2a78742 https://doi.org/10.1080/00137919308903101 Zobrazit plný text záznamu