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You are building a DCF for a manufacturing business and observe the following historical end-of-period working capital balances on the balance sheet: Balance Sheet 2013A
You are building a DCF for a manufacturing business and observe the following historical end-of-period working capital balances on the balance sheet: | ||||||||||||
Balance Sheet | 2013A | 2014A | 2015A | 2016A | 2017A | Column1 | Column2 | Column3 | Column4 | Column5 | ||
Revenues | 14,191.00 | 14,758.70 | 15,349.00 | 15,963.00 | 16,601.50 | |||||||
Inventory | -2,104.00 | 2,562.00 | 2,420.00 | 2,657.00 | 2,987.00 | |||||||
Prepaid expenses | 89 | 121 | 76 | 134 | 189 | |||||||
Accrued expenses | 185 | 210 | 221 | 236 | 302 | |||||||
Accounts Payable | 856 | 893 | 930 | 987 | 1,145.00 | |||||||
Based on managements projections, revenue is expected to grow at 5% over each of the next 5 years. You assume that all working capital assets and liabilities will also grow at 5% annually over the next 5 years. | ||||||||||||
#1 Question: What is the expected impact of working capital on unlevered free cash flow in 2022 of the forecast? |
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