XCK Wrote: ------------------------------------------------------- > For the purposes of calculating FCInc (ie Capex), > is it the difference in gross PPE or net PPE? It is gross PPE because depreciation is not included
I think in most cases, cash/cash equivalents/marketable securities are all lumped together
it sucks that after doing like 100 of these questions, I still get messed up. It’s still not perfect.
Use Gross PPE in conjunction with Depreciation to calculate FCI. If given Net PPE, then great, use that - but then forget about depreciation. Net PPE is Gross PPE - Depreciation. So the change is Net PPE is the Capex. The change in Gross PPE is the Capex - Depreciation.
lmb please, you seem to have flipped your facts. you are wrong. if given gross ppe => change in gross ppe = FCInv If given net ppe => Change in net ppe + Depreciation expense from income stmt = FCInv. look at the fcf question in the mock AM for confirmation. that had net ppe, depreciation and they also gave you the capex amount. compare net ppe change + depreciation with that amount.
Try using one formula to check the other against the answer choice. There are only 3 answer choices so it should be easy to spot which formula to use/not to use. Regardless CA-Cash&Equiv. - (CL- STD/notes payable, etc…) should be golden.
> > Regardless CA-Cash&Equiv. - (CL- STD/notes > payable, etc…) should be golden. Are you sure that notes payable is considered as interest bearing debt? I don’t think we should ignore it as we do LT and ST debt.
revisor Wrote: ------------------------------------------------------- > > > > Regardless CA-Cash&Equiv. - (CL- STD/notes > > payable, etc…) should be golden. > > Are you sure that notes payable is considered as > interest bearing debt? I don’t think we should > ignore it as we do LT and ST debt. Yes Notes payable is interest bearing debt (short term)
I’m going with Regardless CA-Cash&Equiv. - (CL- STD/notes payable, etc… I’ll also try the a/r inventory - a/p accrued expenses too