Question
Why can a long cash conversion cycle create financing needs in a model?
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Answer
Cash is tied up longer in working capital.
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Question
If capex increases in a forecast, what is the immediate effect on free cash flow?
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Answer
Free cash flow decreases.
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Question
Why must PP&E be tied to capex projections in a financial statement model?
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Answer
Because capex drives the future asset base and related depreciation.
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