If you do Financial Modeling you have to have some understanding of Accounting.
Here are some ratios that you need to know. They are part of the “survival kit”
Working Capital:
The Working Capital is the difference between the Current Assets and the Current Liabilities.
So: Working Capital = Current Assets – Current Liabilities
The Current Liabilities are the debt to be paid within the year.
The Cash Flows used to repay the debt come from the Current Assets.
Thus, the Working Capital is what is left to the company if all current debts are paid. Read the rest of this entry »
Posted by alexlega 