Working Capital For FCFF Issue

CFA Level II Equities
#1

Hey guys, hope you’re all doing well.

Im having trouble with the Working Capital part of the Formula for FCFF. I would like a surefire way to calculate it quickly. Also, the formula is FCFF = NI + NCC + Int(1-t) - FCInv MINUS WC. The MINUS part, should it impact the final number? So if i have a net of -45 WC, it will become +45 in the formula -(-45)? These are the doubts that I am having. If anyone has an easy way to ensure accuracy when getting the final number, that would be fantastic. Thanks.

#2

For clarification, the formula calls for the change in working capital. If working capital increases, that is a use of cash so it would be a negative value in the FCFF equation. If working capital decreases, that is a source of cash so it would be a positive value in the FCFF equation.