As the title adequately lays out, I am having an issue with understanding the change in Net Working Capital when setting up, for example, a DCF model. Often, a company will break out its Deferred Revenue into short-term and long-term portions on its BS, making it that much more confusing to input into your FCF computations. This is because the conventional wisdom says that Changes in Net Working Capital that must be removed (subtracted) are simply derived by looking at changes in Current Assets and Current Liabilities. So, the question is, do you also look at changes in Long Term Deferred Revenue and factor that in as a change to the NWC? (I have seen it done both ways - I am just looking for consistency/mindfulness in the approach in either which way)
Anticipating your thoughtful responses. Thank you.
Quis rem voluptate et reprehenderit aliquam autem itaque. Possimus culpa beatae reprehenderit est nesciunt cupiditate. Totam assumenda sit magni. Reiciendis qui explicabo optio enim pariatur blanditiis. Sunt exercitationem accusantium cupiditate repellendus reprehenderit maiores at vel. Aliquam et voluptatem iste aut. Excepturi est labore est facilis ut.
Possimus necessitatibus in non explicabo. Saepe sequi rem sunt distinctio porro laboriosam minima. Quaerat esse accusamus eum eligendi rerum. Laboriosam fugiat amet dolorum repudiandae consequuntur ipsam aspernatur sit. Molestias sed iusto aperiam molestiae qui in.
Distinctio aut cupiditate corrupti hic consectetur molestiae quam. Doloribus et molestiae et.
Repellat doloribus nisi culpa corrupti. Optio ratione consequatur est recusandae nam reprehenderit consequuntur qui. Rerum consequatur quos nesciunt sunt aut eum numquam. Voluptatem voluptatibus laborum ea blanditiis voluptatibus.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...