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Do you include Deferred income taxes current for calculating current assets in working capital calculation?


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2008-01-31 01:41:27
2008-01-31 01:41:27

No you dont. Think about it, part of the equation for free cash flow is defined as subtracting out changes in working capital, capex, and changes in deferred taxes. changes in deferred taxes should be used in calculating cash taxes, not changes in working capital


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A measure of both a company's efficiency and its short-term financial health. The working capital ratio is calculated as:Positive working capital means that the company is able to pay off its short-term liabilities. Negative working capital means that a company currently is unable to meet its short-term liabilities with its current assets (cash, accounts receivable and inventory).Also known as "net working capital", or the "working capital ratio". By Muhammad Ahmed KasiCalculation formula: Net Working Capital = Current Assets minus Current LiabilitiesCurrent asset is also called as Working capital, also known as Gross working capital or GWC, is a financial metric which represents operating liquidity available to a business.Working capital might mean: shows the portion of a firm's total assets belonging to the firm's owner. The every-day capital of business that is used in trading operations that can be calculated as the difference in current liabilities and current assets is known as working capital.

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