FRA_

jitender.grover99
Posts: 4
Joined: Mon Feb 15, 2016 11:13 am

FRA_

Postby jitender.grover99 » Tue May 10, 2016 9:41 am

Hi .

Few ques I have -
1) Is notes payable short term debt?

2) in calcutaing working capital - do we take notes payable also?? Do we take all short term liabilities???

3) in Debt to asset ratio for WACC, debt is LT + ST Debt? Or only LT debt ?

4) in D/E ratio for unlever / lever beta , same question on debt as q3.

Many Thanks.

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: FRA_

Postby edupristine » Tue May 10, 2016 10:58 am

Hi Jitender

1. Notes Payable- Notes payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. it is a short term debt instrument.Notes payable make up a common category of current liabilities shown on the balance sheet. It include debt obligations payable within a 12-month period. A note is a formal written commitment to repay debt with stated interest over a particular time frame.

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Re: FRA_

Postby edupristine » Tue May 10, 2016 11:04 am

Hi Jitender

2. Working capital is the difference between the current assets or the short-term assets that a company holds and the current liabilities or the short-term liabilities which the company has to dispose of. Thus, working capital actually depicts the financial health of the company in a short period. It shows whether a company has enough finances or assets to take care of any short-term liabilities that may arise. Calculation of the working capital is done after calculating both the current assets and liabilities.


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