this will be on the exam... net, difference, determine, question, correct

bcp901

OK...2 issues, similar question.

1. When calculating FCFF you need to determine change in NWC. It is my understanding that you take Current Assets - Cash and net that with Current Liabs.? I have had trouble with this the past two years. Is this understanding correct?

(side note, when you calculate FCINV you take difference in gross PP&E right?)

2. When calculating Aggregate Accruals you take [Total Assets- Cash/ST Investments] - [Total Liabs - ST/LT debt]