Why don’t we include change in cash while calculating change in Current Assets for the WCINV formula?
because we are trying to solve for the change in cash ie FCF
Cash is what you are trying to calculate in FCFF and FCFE, including it in WCinv would be double counting the cash. ie. Investment in inventory (a current asset) is a cash outflow, investment in cash (also C.A.) is not a cash outflow.