Finance

Have finance questions? Ask a financial expert online.

Connect one-on-one with {0} who will answer your question

This answer was rated:

★★★★★

If the year-over-year net change in working capital is more…

If the year-over-year net...

If the year-over-year net change in working capital is more negative, isn't that positive to cash flow?

Accountant's Assistant: Have you talked to a financial professional about this?

Haven't talked to a professional, just ensuring I understand NWC and its affect on cash flow correctly.

Accountant's Assistant: Anything else you want the Accountant to know before I connect you?

No - thanks!

Show Less

Ask Your Own Finance Question

Customer reply replied 2 years ago

E.G. Working Capital (WC) for 2018 is -$100 and Working Capital for 2019 is -$200.....Net Change in WC is -$100. Cash flow for 2019 is then EBIDTA minus Change in WC or EBIDTA minus -$100 OR EBIDTA PLUS $100?

Answered in 16 minutes by:

10/12/2019

Financial Professional: Megan C, Certified Public Accountant (CPA) replied 2 years ago

Megan C, Certified Public Accountant (CPA)

Category: Finance

Satisfied Customers: 16,632

Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Verified

Thank you for your question. My name is ***** ***** I will be happy to help you today :-)

Financial Professional: Megan C, Certified Public Accountant (CPA) replied 2 years ago

Working capital is current assets minus current liabilities. Current assets include not only cash, but also accounts receivable. Current liabilities are your liabilities due within a year.

If you had 100 CA and 200 CL, your working capital would be -100

If you had 100 CA and 300 CL, your working capital would be -200

Working capital and EBITDA are just two metrics to look for in a business. Working Capital gives you an idea of if you are managing your short term obligations, and how well you could pay debt if needed.

It's not so simple as reconciling working capital to EBITDA/cash flow. Many other things can impact it. If your working capital is growing negative, it's not typically a positive thing.

Here's a good article to read on the subject: https://yourbusiness.azcentral.com/differences-between-ebitda-working-capital-17738.html

Please let me know if you need anything additional. If not, please rate positive.

Customer reply replied 2 years ago

Thank you for your answer. Just to clarify, could the negative change (further negative) be a positive to cash flow?

Financial Professional: Megan C, Certified Public Accountant (CPA) replied 2 years ago

It could be, but it's not definitive driver.

Please let me know if you need anything additional. If not, please rate postiive

Megan C, Certified Public Accountant (CPA)

Category: Finance

Satisfied Customers: 16,632

Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

Verified

Megan C and 87 other Finance Specialists are ready to help you

Ask your own question now

Was this answer helpful?

Yes

How JustAnswer works

Describe your issueThe assistant will guide you

Chat 1:1 with a financial professionalLicensed Experts are available 24/7

100% satisfaction guaranteeGet all the answers you need

Related Finance Questions

Check my answer... Atlantic Company is a wholesaler seller

Please check my answer... Atlantic Company is a wholesaler seller of canvas sails for sail boats. Atlantic Company has a perpetual inventory system. On May 1, 2018 it sold 100 sales to its customer Bu… read more

Manal Elkhoshkhany

Tutor

2,317 satisfied customers

Filing my taxes for an LLC online. It's 2 members, my spouse

Filing my taxes for an LLC online. It's 2 members, my spouse and I. Briefly, Started in Sept 2019. The business generated $200 in income. We have about $1980 in startup fees. On box 22 of the 1065 for… read more

Carter McBride

LLM

9,250 satisfied customers

How might changing one of the financial statements affect

How might changing one of the financial statements affect the other financial statements? … read more

Lane

JD, MBA, CFP, CRPS

Doctoral Degree

22,704 satisfied customers

Please i would like you to assist me with how time,cash flows and cost

Please i would like you to assist me with how time,cash flows and cost of capital affect the valuation of asset… read more

taxmanrog

Master's Degree

2,203 satisfied customers

(SCF-Direct Method) Condensed financial data of Fairchild

(SCF-Direct Method) Condensed financial data of Fairchild Company for 2010 and 2009 are presented below. FAIRCHILD COMPANY Comparative Balance Sheet as of December 31 2010 and 2009 2010 2009 Cash $1,8… read more

Manal Elkhoshkhany

Tutor

2,317 satisfied customers

Your company has been offered credit terms of 4/30, net 90

Your company has been offered credit terms of 4/30, net 90 days. What will be the nominal annual percentage cost of its nonfree trade credit if it pays 120 days after the purchase? (Assume a 365-day y… read more

JKCPA

CPA

Bachelor's Degree

844 satisfied customers

1. Harrison Company uses the indirect method to prepare its

1. Harrison Company uses the indirect method to prepare its statement of cash flows. Please refer to the following information for the year 2014: Retained earnings, beginning balance: $125,000 Retaine… read more

Manal Elkhoshkhany

Tutor

2,317 satisfied customers

rakhivasavada Net Income and Net Operating Cash Flows are

rakhivasavada Net Income and Net Operating Cash Flows are both important indicators of the health of a company. But why are they different? What do they have in common, and what makes them so importan… read more

Rakhi Vasavada

Financial and Legal Consultant

Bachelor's Degree

2,614 satisfied customers

Hello, This is the problem, could I get the excel spread

Hello, This is the problem, could I get the excel spread sheet? Bethesda Mining is a midsized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company … read more

Manal Elkhoshkhany

Tutor

2,317 satisfied customers

Oklahoma Instruments (OI) is considering a project called F-200

Oklahoma Instruments (OI) is considering a project called F-200 that has an up-front cost of $250,000. The project's subsequent cash flows are critically dependent on whether another of its products, … read more

ConceptsCoach

Certified Public Accountant (CPA)

Master's Degree

171 satisfied customers

Assume that you have been asked to place a value on the ownership

Assume that you have been asked to place a value on the ownership position in Briarwood Hospital. Its projected profit and loss statements and retention requirements are shown below (in millions): Foc… read more

Anita L. Eisthen, CFA, CPA, MBA

Owner and Chief Investment Officer

Master's Degree

83 satisfied customers

Problem 1 Assume that you have been asked to place a value

Problem 1 Assume that you have been asked to place a value on the ownership position in Briarwood Hospital. Its projected profit and loss statements and retention requirements are shown below (in mill… read more

Anita L. Eisthen, CFA, CPA, MBA

Owner and Chief Investment Officer

Master's Degree

83 satisfied customers

Marges Campground is considering adding a miniature golf course

Marge's Campground is considering adding a miniature golf course to its facility. The course she wants would cost $30,000, would be depreciated on a straight line basis over the 4-year life of the cou… read more

Leonard Dorset

Bachelor's Degree

1 satisfied customers

Leak Inc. forecasts the free cash flows shown below:

1. Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value … read more

Self Employed

Master's Degree

1,129 satisfied customers

A1. (Net income and net cash flows) Julie Stansfield has a

A1. (Net income and net cash flows) Julie Stansfield has a bicycle rental shop with annual revenues of $200,000. Cash operating expenses for rent, labor, and utilities are $70,000. Depreciation is $40… read more

SteveS

Master's Degree

280 satisfied customers

Conch Republic Electronics is a mid-sized electronics m

Conch Republic Electronics is a mid-sized electronics manufacturer located in Key West, Florida. The company president is Shelly Gouts, who inherited the company. The company originally repaired radio… read more

getsetgo

Master's Degree

3,962 satisfied customers

How are the income statement and balance sheet related In

How are the income statement and balance sheet related? In what ways do the elements of the four financial statements interact with one another? How might changing one of the financial statements affe… read more

Smartpants

Associate Degree

18 satisfied customers

. Big Bobs Discount Appliances expects sales of $5,000, $5,000,

. Big Bob's Discount Appliances expects sales of $5,000, $5,000, and $10,000 during April, May, and June (big sale in June). To build business, Big Bob lets all customers buy on credit, and all do so.… read more

Amol Srivastava

Master's Degree

446 satisfied customers

Disclaimer: Information in questions answers, and Show Less

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

JustAnswer in the News:

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...
T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.
BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.
JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.
OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.
Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!
AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.
GPHesperia, CA

< Previous | Next >

Meet the Experts:

Rakhi Vasavada

Financial and Legal Consultant

2,614 satisfied customers

Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years

Manal Elkhoshkhany

Tutor

2,317 satisfied customers

More than 5000 online tutoring sessions.

Megan C

Certified Public Accountant (CPA)

16,632 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

JKCPA

CPA

844 satisfied customers

Bachelors degree and CPA with Accounting experience.

Dave CPA

Accountant

231 satisfied customers

I'm a CPA with over 10 years of experience

ConceptsCoach

Certified Public Accountant (CPA)

171 satisfied customers

Chartered Accountant and MBA

sgriffin26

Loan Officer

93 satisfied customers

Licensed RE Agent, Loan Officer, and NMLO. I have been in residential lending for over 10 years.

< Previous | Next >

Show MoreShow Less