Working Capital

CFA Level II
#1

Is it the same formula for calculating this for Capital Budgeting and FCF?

#2

Yep

#3

check explanation on page 385 volume 4 in general accounting WC is current assets less current liabilities but for cashflow and valuation WC excludes cash, cash equivalent, short term debt,and current portion of long term debt

#4

Austin12 Wrote: ------------------------------------------------------- > Yep Wrong. In capital budgeting its a straight CA - CL calculation. Under FCF valuation, NWC is calculated as (CA - Cash & equivalents) - (CL - Interest bearing debt).

#5

i have never seen the CL-interest bearing debt described as “less interest bearing debt” reference? it makes sense and I believe you since it works in the calculations, but is this in CFAI?

#6

SkipE99 Wrote: ------------------------------------------------------- > i have never seen the CL-interest bearing debt > described as “less interest bearing debt” > > reference? it makes sense and I believe you since > it works in the calculations, but is this in CFAI? This is from Stalla and is consistent with their 2009 and 2010 material.