When we calculate change in working capital in DCF approach, whether we should take effect of change in cash/bank also in formula of (Current Assets - Current Liability) i.e. Change in Non cash working capital ?
Menu
Valuation of shares - dcf approach
Replies (1)
@ Vinay
DCF is not used for working capital changes but used to find out Value in use and investment appraisal. Operating Cashflows use working capital changes to find out the increase/decrease value. Only receivables, payables and inventory are considered. After calculating all of the three cashflow activities, the net momentum of cash and equivalent shares consider bank and cash.
Non cash charges is depreciation and unrealised profits. There is no other non cash working capital defined in IndAS 1. Non GAAP measures are not there.
Recent Threads
- Please advice what itr to file for AY 2025-26
- Reporting Capital Gains of NRI in ITR
- Gratuity income as salary income on AIS portal. Is
- 80C deductions not being allowed in ITR2 for old r
- Unable to submit ITR 1 return
- Direct Tax(Income from Salary)
- Income from House Property or Business
- 44ADA Business code 14005
- How to rectify Form 67 that is already submitted
- Which year to consider for Property tax if sold af
Related Threads
CAclubindia
