Does WCInv include cash?

In FCFF you remove the change in WCInv. I thought WCInv was: current assets - current liabilities which would include cash But I missed an FCFF question on the Sample 2 exam because I included cash in my calculation. Can anyone please clarify?

WCinv does not include cash (on the current asset side) or interest bearing current liabilities

You don’t include cash. You only use current asset - current liabilities, if cash stays the same.

Basically, WCinv = AR + Inventory - AP

exclude cash, notes payable, current portion of LT debt… include everything else that would be in WC.

McLeod81 Wrote: ------------------------------------------------------- > Basically, WCinv = AR + Inventory - AP In addition to AR & Inventory they also included “other current assets”. Just wanted to give you a heads up.

Yeah, anything that’s not cash. Same with the liabilities (anything w/out interest)

Never on the CFA, in real life… well no no need to confuse things.