CFAI Moch: Afternoon Q51 count, different, change, error

HuskyGrad2010

Use the data in charts to calc calculate FCFE:

There's a bunch of different ways to get there, I like to get FCFF first then go to FCFE. They want to do it different and go from EBITDA - thats fine too.

FCFE = EBITDA(1-tax rate) + Dep (tax rate) - FCinv - WCinv + Net Borrowing

First error:

Calculating WCinv. You have to calc the change year over year, but you dont count changes in cash, or changes in notes payable (ref R43 p 406). They simply did 2010 CA-CL minus 2009 CA-CL and got 3.30. I think you should get 1.8, as AR increases 11.5 (use) Inventory increases 17.2 (use) and AP increases 30.5 (source). All together thats a net USE of cash of 1.8.

Second error:

Calculating Net Borrowing:

Usually this would just be given on the cash flow statement, but not today. You see that y/y LTD increased by 7.5 and Notes Payable increased by 5. This means we borrowed 7.5+5=12.5.... CFAI for some reason decided to subtract and did 7.5-5=2.5

Did any one else pick up on these errors. Are there other errors in the Moch you've noticed?

Matt