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Dear tutor,
In the answer they did not include b/f Non cash expense into the Cap Employed figure.
My understanding from the lectures is that we should include the b/f.
Can you please confirm if I have misunderstood?
Thank you in advance
Non-cash expenditure was 12 in both 2006 and 2007.
The b/f capital employed as at the start of 2006 (279) has not been affected by this expenditure.
To my mind the b/f capital at the start of 2007 (book value 340) should have had 12 added back to it in respect of the non-cash expenditure during 2006.
Thank you
Yes I added back the non cash in both NP.
I can see that this is not available for 2006, but I added it to my 340 in 2007 as well as leases and GW – ended up with 418.
If this is to come up in an exam question, should I assume it has been added back already as may have happened in this questinon?
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