If using the financial statements to calculate CFO- I know how to use the income statement to start from NI & back out non-cash- but I forget exactly how to handle the balance sheets? Don’t we just use the total of working capital over the previous ending total of working capital? (That would be the increase in working capital that year…but don’t we exclude accounts cash and notes payable? Why? And do we exclude accounts payable as well? or anything else?
thanks!