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Expected impact of working capital on unlevered free

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You are building a DCF for a manufacturing business and observe the following historical end-of-period working capital balances on the balance sheet:

2013 2014 2015 2016 2017 Revenues 14,191.0 14,758.7 15,349.0 15,963.0 16,601.5 Inventory 2,104.0 2,562.0 2,420.0 2,657.0 2,987.0 Prepaid expenses 89 121 76 134.0 189.0 Accrued expenses 185.0 210.0 221.0 236.0 302.0 Accounts Payable 856.0 893.0 930.0 987.0 1,145.0

Based on management's projections, revenue is expected to grow at 5% over each of the next 5 years. You assume that all working capital assets and liabilities will also grow at 5% annually over the next 5 years.

Question: What is the expected impact of working capital on unlevered free cash flow in 2022 of the forecast?

Reference no: EM132594842

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