What is a Working Capital Trend Analysis Report?

Working Capital trend reports are considered important liquidity analysis tools and are often used by CFOs and analysts to determine the company’s ability to pay for short term obligations. Some of the key functionality in this type of report is that it dynamically displays data from the past 13 months. The chart on the top of the report gives a clear idea of the historical trend in Working Capital (left axis) and the Current Ratio (right axis). The rows displays Current Assets and Current Liabilities and the Total rows are expandable so the user can see the detailed accounts or categories behind the totals. The last row calculates the Current Ratio. The orange row displays an automatically generated narrative about the current liquidity situation. You find an example of this type of report below.

Purpose of Working Capital Trend Reports

Companies and organizations use Working Capital Trend Reports to monitor the monthly swings in current assets and liabilities. When used as part of good business practices in a Financial Planning & Analysis (FP&A) department, a company can improve its liquidity as well as reduce the chances that issues arise because managers did not keep an eye on the company’s ability to pay for current obligations.

Working Capital Trend Report Example

Here is an example of a Working Capital Trend Report with graphical KPI analysis.

Working Capital Trend Analysis Report Example

Working Capital Trend Analysis Report Example

You can find hundreds of additional examples here

Who Uses This Type of Report?

The typical users of this type of report are: CFOs, Analysts, Treasurers and Controllers.

Other Reports Often Used in Conjunction with Working Capital Trend Reports

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Working Capital Trend Reports, along with trended financial statements,  accounts receivable (AR) aging reports, monthly cash flow-,  balance sheet- and income statements, liquidity dashboards, cash flow forecasts and other management and control tools.

Where Does the Data for Analysis Originate From?

The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Acumatica, Netsuite and others.

In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.

What Tools are Typically used for Reporting, Planning and Dashboards?

Examples of business software used with the data and ERPs mentioned above are:

  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)

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