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3.3 Working capital - notes

In the previous section we looked at sources of finance and their suitability and used different methods of investment appraisal. We now move on to look at working capital and the preparation of cash flow forecasts.

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By the end of this section you should be able to:

  • Define working capital and explain the working capital cycle
  • Prepare a cash-flow forecast from given information
  • Evaluate strategies for dealing with liquidity problems