How would a decrease in net working capital in your DCF? What does that mean?

Published On - February 22, 2023

Josh Corporate Banking / Commercial Banking / Private Debt, Corporate Development, Financial Modeling, FP&A, Investment Banking, Private Equity

A decrease in net working capital would increase unlevered free cash flow. It represents less money being tied up in the daily operations of the business. For example, an increase in the number of days it takes us to pay our suppliers (also known as days payable outstanding) would free up cash.