In SS12, Schweser presents a formula as following for FCFE: FCFE = NI - [(1 - DR)*(FCInv - Dep)] - [(1 - DR) * WCInv] Why not simplify the formula to: FCFE = NI - [(1 - DR)*(FCInv - Dep + WCInv)] Am I missing something here ?
You’re not missing anything. The latter equation you’ve posted is how CFAI presents the calculation.