is note payable part of net working capital or total debt?

CFA Level II
#1

is note payable part of net working capital or total debt?

#2

Debt NWC = changes in A/P - A/R - Inv

#3

Damil4real Wrote: ------------------------------------------------------- > is note payable part of net working capital or > total debt? NWC = (Delta A/R + Delta Inv) - (Delta AP + Delta deferred expenses) No notes payable, no cash, no s.t. debt, no current portion of l.t. debt. Notes payable goes in netborrowing, which you need for FCFE.

#4

pwned

#5

Dreary Wrote: ------------------------------------------------------- > Damil4real Wrote: > -------------------------------------------------- > ----- > > is note payable part of net working capital or > > total debt? > > > NWC = (Delta A/R + Delta Inv) - (Delta AP + Delta > deferred expenses) > > No notes payable, no cash, no s.t. debt, no > current portion of l.t. debt. > > Notes payable goes in netborrowing, which you need > for FCFE. its the opposite Delta A/P - Delta A/R & Inv

#6

It’s already minus in the formula.

#7

I’ve been struggling with NWC…so we’re adding changes to inventory and AR rec. and subtracting changes in AP? Thanks for confirmation.

#8

In the FCFF/FCFE formulas you are subtracting NWC. WC = CA - CL NWC = Change in CA - Change in CL NWC = (change in AR (could be plus or minus) + change in Inv (could be plus or minus) + … ) - (change in AP (could be plus or minus) + …)

#9

what about prepaid expenses and accrued expenses?

#10

Damil4real Wrote: ------------------------------------------------------- > what about prepaid expenses and accrued expenses? include them

#11

nwc = change in current assets - change in current liabilities Current assets: Inventory, accts receivable current liabilities: Accts payable, accrued liabilities (sometimes)