All this while, I was computing Net Borrowing for FCFE as -
Net Borrowing = Increase in Notes payable + Increase in Long Term Debt
But, I hit upon a question in the mock exam and the solution says -
Net Borrowing = Increase in Long Term Debt - Increase in Notes Payable ! :-/
Was I wrong all this while, or is it the solution?
Surely that’s a typo. It’s either _ + Increase _ or _ – Decrease _.
You are right. Assuming the solution is correct, it could be a way of adjusting working capital, but not sure without seeing the question.
Yes!
Thank you both.
Get all of those mistakes out of your system now, leaving none for a week from Saturday.
My pleasure.