Capital requirements planning


A company's capital requirements are determined by its cash inflow and outflow. In contrast to short-term-oriented liquidity planning, capital requirements planning serves the purpose of planning the stock of financial instruments for the long term. It is usually closely related to long-term investment planning, since investments can cause long gaps between cash outflow and expected inflow. The amount of capital requirements is thus determined not only by the amount of inflow and outflow, but also by the time lag differences between outflows and inflows.


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