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Working capital (WC) is a financial metric which represents operating liquidity available to a business, organisation, or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital is equal to current assets.
Easy: Working capital is derived from the balance sheet and equals the sum of current assets such as cash and inventory after subtracting current liabilities such as accounts payable and short ...
Unlevered free cash flow (i.e., cash flows before interest payments) is defined as EBITDA − CAPEX − changes in net working capital − taxes. This is the generally accepted definition. If there are mandatory repayments of debt, then some analysts utilize levered free cash flow, which is the same formula above, but less interest and ...
Changing in net working capital: it is the cost or revenue related to the company's short-term asset like inventory. Capital spending: this is the cost or gain related to the company's fix asset such as the cash used to buy a new equipment or the cash which is gained from selling an old equipment.
NI is the firm's net income; D&A is the depreciation and amortisation; b is the debt ratio; Capex is the capital expenditure; ΔWC is the change in working capital; Net Borrowing is the difference between debt principals paid and raised; In this case, it is important not to include interest expense, as this is already figured into net income. [4]
It is commonly represented as total assets less current liabilities (or fixed assets plus working capital requirement). [2] ROCE uses the reported (period end) capital numbers; if one instead uses the average of the opening and closing capital for the period, one obtains return on average capital employed (ROACE). [citation needed]
Similarly, reductions in capital intensity (for example by reducing working capital) will reduce EV. EV can be negative if the company, for example, holds abnormally high amounts of cash that are not reflected in the market value of the stock and total capitalization. [2]
The fully diluted calculation consists of approximately 303 million shares outstanding, which grew less than 3% year over year, 22 million related to unvested RSUs and PRCUs, and 3 million shares ...