Why might a company not include other current assets and other current liabilities in their NWC calculation? Working on something currently where NWC is stable when excluding those two line items but deteriorates once including them. Trying to understand why a company might do this and would appreciate any guidance.
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It makes cash flow look better as adjusted. What's the context here?
Analyzing a credit opportunity for a case interview and noticing that the NWC looks worse when not adjusted. Assuming that this would be a risk/negative as the calculation including those items is showing a different image than management presentation (management indicates stable NWC and no seasonality while unadjusted NWC illustrates significant NWC deterioration)
depends on what is in other assets / liabilities. if it is non-core to normal operations, it will either be treated as a debt like item or not considered at all
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