Is the Net working capital correct?

BearingPoint Case: Digital Business Model of a Parking App
New answer on Aug 06, 2020
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Anonymous A asked on Aug 05, 2020

Hi Guys, I was wondering if the Net Working Capital is calculated correctly. It should be 5% of revenues - in 2022e we have like ~4mio revenues which schould give the something around ~200k Net Working Capital. However, the table comes up with much lower values. I am doing something wrong here? BR

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Ian
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replied on Aug 06, 2020
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi,

A great lesson in listening/reading carefully!

The prompt says "the client is interested in how much money he has left at the end of the year for investments"

So, you should be doing your calculations for 2019, not 2022

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Esra on Oct 15, 2021

Could you please explain the calculations then? I cannot get there.

Anonymous B on Dec 13, 2022

Hello! Here is my explanation, I hope it helps: The text states that the required NWC is 5% of revenues. Thus, as stated above, if the revenue is 4.284.000 € in 2022, the required NWC is 214.200 €. However, the companyalready had a required NWC of 71.400 € in 2021 (5% of 1.428.000 €). The table highlightes the delta of these two numbers, thus: 214.200 (NWC required in 2022) - 71.400 (NWC which the company already had in 2021) = 142.800 €. Hope this helps :)

Ian gave the best answer

Ian

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