troymo

Correct, yella, for capital budgeting it's simple: CA - CL.

Let me type in verbatim CFAI Volume IV page 385:
"Although working capital is often defined as current assets minus current liabilities, working capital for cash flow and valuation purposes is defined to exclude cash and short-term debt (which includes notes payable and the current portion of long-term debt). When finding the net increase in working capital for the purpose of calculating free cash flow, we define working capital to exclude cash and cash equivalents as well as notes payable and the current portion of long-term debt. Cash and cash equivalents are excluded because a change in cash is what we are trying to explain. Notes payable and the current portion of long-term debt are excluded because they are liabilities with explicit interest costs that make them financing items rather than operating items." (pg. 386 Reading 41: Free Cash Flow Valuation)

Hope this helps. I think it's rather important not to confuse the two fomulae.

Best in June!