Working Capital Estimation/Management -A Financial Modeling Approach

Working capital estimation requires careful consideration of its drivers and the inter-relationship among them captured in the form of model which can then be used for performing what analysis is required to evaluate various policy options and to understand the underlying trade-offs. This significantly improves the quality of decision making and ensures global optimization for a firm. This paper demonstrates the whole process of building the financial model for working capital estimation, optimization and studying the impact of working capital policy changes on the final outcome namely product costing.