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

[Damil4real]

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

 

[ZeroBonus]

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

 

[Dreary]

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.

 

[MFIN]

pwned

 

[ZeroBonus]

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

 

[Dreary]

It’s already minus in the formula.

 

[jgrandits]

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

 

[Dreary]

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) + ….)

 

[Damil4real]

what about prepaid expenses and accrued expenses?

 

[Dreary]

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

 

[MMI]

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