Capital requirement planning

Definition of capital requirements planning

The capital requirement calculation is used to determine the capital requirement in a relatively simple way. It is carried out in three steps, whereby the different properties of the fixed assets and current assets - especially with regard to time - are taken into account:

Determination of the investment capital requirement

First of all, the investment capital requirement is determined by adding the amounts caused by the fixed assets acquisition cost, e.g. B. for machines.

Working capital requirement

The current capital requirement is then determined by multiplying the retention periods of the current assets by the daily average payments and adding the results

Total capital requirements

The total capital requirement is determined by adding the fixed capital requirement and the working capital requirement. The example results in a working capital requirement of € 1,395 million. If the capital requirement is assumed to be € 3 million, the total capital requirement is € 4,395 million.

Because of its limited accuracy, the capital requirement calculation should only be used for start-ups or business expansions.