Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )

2004

($millions)

2003

($millions)

Total current assets 13,922 12,952

Accounts payable 5,779 4,956

Accrued liabilities 1,633 1,288

Income taxes payable 304 382

Current portion of long-term debt 504 863

Currentliabilitiesofdiscontinued

operations

0 825

Total current liabilities 8,220 8,314

Working capital 5,702 4,638

Noncash current assets 11,677 10,152

Nondebt current liabilities 7,716 6,626

Noncash working capital 3,961 3,526

To get from current assets to noncash current assets, we
removedtwoitems—cash becauseitisnota wastingasset
andcurrentassetsofdiscontinuedoperationsbecausetheyare
a nonrecurring item. For nondebt current liabilities, we
eliminatedthecurrentportionoflong-termdebtandliabilities
from discontinued operations.

Estimating Expected Changes in Noncash Working Capital

Although we can estimate the noncash working capital
changefairlysimplyforanyyearusingfinancialstatements,
thisestimatehastobeusedwithcaution.Changesinnoncash
workingcapitalareunstable,withbigincreasesinsomeyears
followedbybigdecreasesinthefollowingyears.Toensure
thattheprojectionsarenottheresultofanunusualbaseyear,