Equity Refresher Reading 28 Mistake?

CFA Level III Equities
#1

I just starting reviewing refresher reading 28 Equity Valuation
I believe … FCFF calculation from net income solution on page 10 is incorrect??.
Specifically the change in working capital is wrong.

fro example, change in working capital in 2018 should not be (56K) but rather 46K.
current assets (inventory) are increasing 6k in 2018 and will reduce cash flow by 6k.
however current liabilities (accounts payable ) are increasing 50k and this will increase cash flow by 50k
Therefore the net change in working capital is 44k not (56)??? other years are also miscalculated.
can anyone please confirm there is a mistake in the working capital adjustment to calculate FCFF in all three years in solution?

Ron Zolla

#2

But the accounts receivable (current asset) increased by 100 in 2018. :man_teacher:

\Delta WC = \Delta CA - \Delta CL

\Delta WC = (+100 + 6) - (+50) = +56

#3

I missed that. I am good! Thank you so much!!