This is from example 6 part 2, page 401 (CFAI text on FRA, Reading 27). I do not understand the solution to part 2, where it says " Marketable securties (if treated as short-term investments) would not be included in NOA…" I thought Marketable securities are included in the calculation of NOA as CFAI did in eg 2 (page 373)…NOA = (Tot assets- cash and mktable securiteis )- (Tot lia - Tot debt). Besides I think Marketable securities are “Short term investments”, why they say in the solution to part 2 that "Marketable securties (if treated as short-term investments) …???
Let’s define operating assets per cfai text: the difference between operating assets and operating liabilities Total assets less cash and short term investments =OA (Operating Assets) Total Liabilities Less *Total Debt =OL (Operating Liabilities) *Note that total debt consists of both long term debt and the current portion of long term debt Now OA-OL=NOA On page 375 it states that *2006 total assets are 90,973 and cash and mktble securites are 10,214+596=10,810… so OA are 90,973-10,810=80,163 total liabilities were 61,667 and total debt was 2,175+13,399=15,574 …so OL are 61,667-15,574=46,093 Thus NOA = 80163-46,093=34,070 and this matches the books calculation of 2006 NOA.
ridiculous starting this early