FCFE calculation and net borrowing

When calculating FCFE, let’s say we start with net income. When using the balance sheet to find the increase in net borrowing that year, would we look at the change in long-term debt ony? Or would we also look at the change in short-term debt as well, and add them both together?

Thanks,

NWC = Change in Accounts Receivable + Inventory - Change in Accounts Payable (Ignore ST Debt such as notes payable)

FC = CAPEX, CFI or Change in gross fixed assets. If you are given net fixed assets you must add back depreciation

NB = Long Term Debt + Short term debt (Notes payable) If they are both increasing we add NB. If they are decreases subtract NB.

Hope that clears it up

it does…thanks!