LT liabilities , in cashflow statement

ZZainb4y ago

Hello tutor, I have a q regarding repayment or changes/movement in LT liabilities or LT debts/borrowings. as we know that it supposed to be reflected in cashflow under financing activities. however can companies reflect this as part of working capital changes under operating activities? I really appreciate your kind input on the above. many thanks sir.

P2-D2Tutor4y ago#1

Hi, No, the movement cannot be adjusted as part of working capital. Working capital is the inventory, receivables and payables that are used as short-term funding or to generate cash within the business. The debt/long-term borrowings are specifically there for the purpose of providing finance to the business. Thanks