Going crazy memorizing formulas…things are starting to blur nwcinv and wcinv, Are they the same? Different?
NWCinv is the change in WCinv
NWCinv = change in Assets - change in Liability
For computing FCFF/FCFE, you want the NWCinv
phBOOM Wrote: ------------------------------------------------------- > NWCinv is the change in WCinv I think thats wrong.
Pretty sure thats right
phBOOM Wrote: ------------------------------------------------------- > NWCinv = change in Assets - change in Liability This is not right.
NWCinv = [CA-CL (period t)] - [CA-CL (period t-1)]…excluding cash & marketable securities from CA and current interesting bearing liabilities (i.e. notes payable and current portion of LT Debt).
NWC = net working capital. Isn’t this the same as WC? NWCINV and WCINV are indentical right?
Usually NWC (or just WC) is current assets - current liabs, but for FCFF it is (current assets - cash) - (current liabs - st debt) The fixed investment is just the change in fixed assets