A definition, the confusion it prevents, and the unit where you meet it in action.
Assets = liabilities + equity. Everything the business holds is spoken for by a lender or an owner, so the two sides always match.
Morrow borrows $10,000: cash rises by 10,000 and the loan rises by 10,000. Still balanced.
Unit 02: Every transaction has two sidesRecording revenue when the work is done and expenses when resources are used, on the accrual clock, whatever the cash clock says.
A repair finished in March is March revenue even if the customer pays in April.
Unit 03: Cash runs on a different clockA cost the business has already incurred but not yet paid, so it sits as a liability until payday.
March wages paid in April are a March expense and a March payable.
Unit 03: Cash runs on a different clockThe total depreciation charged on an asset so far. It sits beside the asset and reduces it to the carrying amount.
A $50,000 machine with $18,000 accumulated depreciation has a carrying amount of $32,000.
Unit 07: Pay now, use for yearsBuying assets, a whole business or an ownership stake. Which of the three it is changes the accounting and the tax.
Buying a company is not accounted for like buying one machine.
Unit 21: When businesses combineEBITDA with further items removed by the company or an analyst. Every removal is a claim that the cost does not describe the ongoing business.
A restructuring charge that appears every year does not stop being a cost because it was added back.
Unit 12: EBIT, EBITDA and what gets left outA business that arranges for someone else to supply the goods or service, rather than supplying them itself. An agent reports only its fee as revenue.
A marketplace passing $85 of a $100 sale to the seller reports $15 of revenue.
Unit 05: When does a sale become revenue?Depreciation for intangibles: spreading the cost of a finite-lived intangible asset over its useful life. Also used for unwinding a bond discount or premium.
Acquired technology of $60 with a six-year life gives $10 of amortization a year.
Unit 08: The assets you cannot touchA potential share that would make earnings per share look better, not worse, if included. Those are left out of diluted EPS.
In a loss year, extra shares would shrink the loss per share, so they are excluded.
Unit 10: Who owns the earnings?A resource the business controls and expects to get value from, recognized on the Snapshot (balance sheet).
Cash, a customer's unpaid invoice and a bike lift are all assets, of very different kinds.
Unit 02: Every transaction has two sidesThe auditor's conclusion on whether the financial statements are fairly presented, within a defined scope of assurance.
An unmodified opinion says the statements are fair. It says nothing about next year's returns.
Unit 15: Read a public companyThe capital tied up in operations, averaged across the period, under a stated definition. The denominator for ROIC.
A year's profit divided by a single year-end balance mixes a flow with a stock; use the average.
Unit 17: From numbers to diagnosisThe Snapshot: what the business holds and who has a claim on it, frozen at one date.
It is a photo of balances, not a year of revenue.
Unit 04: One business, three statementsOne hundredth of a percentage point.
A margin moving from 10% to 12% moved 200 basis points.
Unit 01: The language of a businessWhat the accounting records say something is worth: for equity, recognized assets minus liabilities.
Book equity and market capitalization are different numbers answering different questions.
Unit 04: One business, three statementsContracts or orders signed in a period, under whatever definition the company chooses. Not the same as revenue.
A signed annual subscription is a booking today and revenue over twelve months.
Unit 05: When does a sale become revenue?The volume at which contribution exactly covers fixed costs, so profit is zero.
Fixed costs of $4,000 and $20 of contribution per unit break even at 200 units.
Unit 18: What makes growth profitable?Customer acquisition cost: the spending it took to win a customer, under a stated scope of costs and customers.
Spend $300 to win a customer worth $30 of contribution a month and payback takes ten months.
Unit 18: What makes growth profitable?Compound annual growth rate: the single yearly rate that would take the start value to the end value over the years in between.
$100 growing to $121 in two years is 10% a year, because growth compounds.
Unit 01: The language of a businessCash spent on long-lived assets or improvements that become assets on the Snapshot rather than expenses today.
Capitalizing a machine changes when the cost hits profit, not the fact that the cash left.
Unit 07: Pay now, use for yearsThe tax law's label for certain gains, decided by the taxpayer, the asset and the deal. The tax rulebook, not the financial statements, assigns it.
A gain on the Scorecard (income statement) is not automatically a capital gain on the return.
Unit 13: One business, two rulebooksThe value at which an asset or liability currently sits on the Snapshot, after depreciation, impairment and other adjustments.
A machine's carrying amount can differ from both its resale value and its tax basis.
Unit 07: Pay now, use for yearsA part of a larger business drawn out for reporting or for a sale, with its own perimeter of contracts, people, assets and obligations.
The perimeter can cut across legal entities and reported segments.
Unit 22: Take a business apartDays sales outstanding plus days inventory outstanding minus days payable outstanding: how long cash is away from the bank on each turn of the loop.
45 collection days + 60 inventory days − 30 supplier days = 75 days.
Unit 11: Find the cash inside the profitCash moving in or out over a period, on the cash clock, as distinct from accrual earnings.
Borrowing brings in financing cash without a dollar of revenue.
Unit 11: Find the cash inside the profitThe cash the operating loop produced or consumed in the period, as classified by the reporting rules.
The indirect method starts at net income and adjusts for noncash items and timing differences.
Unit 11: Find the cash inside the profitHow long the usable cash can cover the modeled spending and receipts before it runs out.
$120 of cash and $20 of steady monthly burn is six months, before reserves and lumpy payments.
Unit 19: Build a business forecastCost of goods sold: the cost of the inventory that was actually sold in the period.
Opening inventory + purchases − closing inventory, once write-downs and shrinkage are handled.
Unit 06: The cost of making a saleRestating every line as a percentage of one base, usually revenue or total assets, so businesses of different sizes can be compared.
Divide each Scorecard line by revenue and two companies' cost structures line up.
Unit 17: From numbers to diagnosisNet income plus other comprehensive income: every change in equity that did not come from the owners.
OCI has rules about what goes in it. It is not a drawer for unwanted losses.
Unit 10: Who owns the earnings?Presenting a parent and the businesses it controls as one group, with sales between them removed and the outside owners' share shown separately.
A $50 sale from parent to subsidiary disappears; only the $80 sale to the outside customer counts.
Unit 21: When businesses combineRevenue already earned that the business cannot yet bill, because something other than time still has to happen.
Once the remaining condition is met it becomes a receivable.
Unit 05: When does a sale become revenue?Cash received, or due, for goods or services the business still owes. A claim on the Snapshot until the work is done.
An annual subscription paid up front is earned month by month.
Unit 05: When does a sale become revenue?Revenue minus the variable costs in the stated definition, as an amount or a percentage. What each sale leaves to pay the fixed bill.
A $50 product with $30 of variable cost contributes $20. That is not the same as gross margin.
Unit 18: What makes growth profitable?The relationship that makes one business consolidate another. Owning most of the votes is the usual route, but the rules look at power, not only percentages.
A 60% stake usually means control; some structures give control with less.
Unit 21: When businesses combineA promise written into a loan agreement, often a ratio the borrower must keep within limits.
A leverage covenant uses the contract's own definitions of debt and EBITDA, not the earnings release.
Unit 09: Borrowed money has a priceThe right side of an account. It increases liabilities, equity and revenue, and decreases assets and expenses.
Crediting the loan increases it; crediting cash decreases it.
Unit 02: Every transaction has two sidesCurrent assets divided by current liabilities: a rough test of whether short-term resources cover short-term obligations.
A pile of slow-moving inventory raises the ratio without adding a dollar of usable cash.
Unit 17: From numbers to diagnosisDiscounted cash flow: valuing a business by forecasting its cash and discounting each year at a rate that matches its timing and risk.
Always show how much of the answer comes from the years after the forecast.
Unit 20: Value is a claim on the futureThe left side of an account. It increases assets and expenses, and decreases liabilities, equity and revenue. Not a synonym for bad news.
Debiting cash increases the cash balance.
Unit 02: Every transaction has two sidesThe everyday name for a contract liability: customer cash collected before the work is done.
Cash in the bank for a service still owed is a liability, not profit.
Unit 05: When does a sale become revenue?A future tax deduction, or an eligible loss carryforward, recognized today because the books ran ahead of the tax return. It pays off only against future taxable profit.
A valuation allowance trims the part that is not expected to be usable.
Unit 14: Taxes across timeTax that will fall due later because the tax return ran ahead of the books, usually through faster tax depreciation.
Book carrying amount 80, tax basis 60: the $20 gap will be taxed when it is recovered.
Unit 14: Taxes across timeSpreading the cost of a tangible asset over the years it is used, so each year's Scorecard carries its share.
It is a schedule of cost, not a measure of what the asset would sell for.
Unit 07: Pay now, use for yearsEarnings per share after counting the shares that options, convertibles and awards could add, when adding them would lower EPS.
Some instruments change the earnings as well as the share count; anti-dilutive ones are left out.
Unit 10: Who owns the earnings?Days inventory outstanding: how many days of cost of sales are sitting on the shelf.
Compare a year's cost of sales with average inventory, not with one December count.
Unit 11: Find the cash inside the profitA cost that can be traced to one product, job or department without an allocation key.
Direct is about traceability. A direct cost can still be fixed.
Unit 06: The cost of making a saleA cost that goes up, or a benefit that goes away, when businesses are combined or separated.
A carved-out division loses the group's purchasing discounts and pays more for the same parts.
Unit 22: Take a business apartCash or shares paid to owners because they are owners. They reduce equity and never appear as an expense.
A $5,000 dividend lowers retained earnings and cash; profit is untouched.
Unit 10: Who owns the earnings?Days payable outstanding: how many days the business takes to pay its suppliers, with purchases often approximated by cost of sales.
Paying later keeps cash in the bank, until suppliers stop delivering.
Unit 11: Find the cash inside the profitDays sales outstanding: how many days of credit sales are still waiting to be collected.
Collecting ten days sooner releases cash once, without a single new sale.
Unit 11: Find the cash inside the profitSplitting return on equity into net margin times asset turnover times the equity multiplier, using consistent averages.
A high ROE can come from leverage rather than from a better operating margin.
Unit 17: From numbers to diagnosisEarnings before interest and taxes. In the SEC's framing it is built up from GAAP net income by adding back interest and tax, so it keeps nonoperating items.
With $15 of nonoperating income, EBIT is 155 while operating income is 140.
Unit 12: EBIT, EBITDA and what gets left outEBIT with depreciation and amortization added back. A non-GAAP measure in SEC filings, and not a measure of cash.
It leaves out capex, working capital, interest and tax, which is where the cash went.
Unit 12: EBIT, EBITDA and what gets left outEarnings before tax, also called pretax income. Interest has already been deducted.
Operating income 140 + nonoperating 15 − interest 10 = pretax income 145.
Unit 12: EBIT, EBITDA and what gets left outInterest measured at the true yield on the amount actually borrowed, not at the printed coupon.
A bond issued at $950 with a 6% effective rate charges $57 of interest against a $50 coupon.
Unit 09: Borrowed money has a priceIncome tax expense divided by pretax income.
Nondeductible costs and changes in tax estimates push it away from the statutory rate.
Unit 14: Taxes across timeWhat the operating business is worth to lenders and owners together, before anyone's claim is paid.
Subtract net debt and the rest belongs to the owners: the equity value.
Unit 20: Value is a claim on the futureEarnings per share: profit available to common shareholders divided by the weighted-average shares outstanding.
Revenue divided by shares is revenue per share, a different and much bigger number.
Unit 10: Who owns the earnings?The owners' residual claim: whatever is left of the assets after every liability is paid.
Contributions, profits, dividends and other movements change it; a loan does not.
Unit 02: Every transaction has two sidesAverage assets divided by average equity: the leverage term in the DuPont split.
A multiplier of 2 means half the assets are funded by someone other than the owners.
Unit 17: From numbers to diagnosisThe price a willing market participant would pay at the measurement date, under the standard's rules.
In an acquisition, the target's assets are measured at fair value, not at the seller's book amounts.
Unit 08: The assets you cannot touchFirst-in, first-out: the oldest inventory costs go to cost of goods sold first.
When prices are rising, FIFO reports lower cost of sales and higher profit than the average method.
Unit 06: The cost of making a saleA cost that stays the same across a range of activity for a period. Beyond that range it steps.
Rent is fixed until the second workshop is needed.
Unit 18: What makes growth profitable?A quantity measured across a period of time. Revenue, expenses and cash flows are flows.
Annual sales are a flow; the cash balance on December 31 is a stock.
Unit 01: The language of a businessCash left after the operating loop and the investment needed to keep it running. Most often cash from operations minus capex, but definitions vary.
State the definition every time; unlevered FCF starts from a different place.
Unit 11: Find the cash inside the profitGenerally accepted accounting principles: the rulebook for financial reporting in a jurisdiction.
US GAAP is one rulebook. Another country's GAAP is another.
Unit 16: Compare like with likeWhat is left of a purchase price after every identifiable asset and liability of the acquired business has been measured at fair value.
It is not the price minus the seller's book equity; the identifiable assets are revalued first.
Unit 08: The assets you cannot touchGross profit as a percentage of revenue.
Price 125 on cost 100 is a 20% margin, because margin divides by the price.
Unit 01: The language of a businessRevenue minus cost of sales. The first subtotal on the Scorecard, before operating costs.
Rent, salaries and interest still have to be paid out of it.
Unit 04: One business, three statementsInternational Financial Reporting Standards, the rulebook used outside the United States by most listed companies.
Specific differences from US GAAP, such as LIFO and development costs, decide comparability. The label alone does not.
Unit 16: Compare like with likeWriting an asset down when its carrying amount is no longer recoverable under the test that applies to that kind of asset.
Goodwill has its own test; equipment has another. Neither refunds the cash spent.
Unit 07: Pay now, use for yearsThe Scorecard: revenue, expenses, gains and losses for a period, on the accrual clock.
Also called the statement of operations or the P&L.
Unit 04: One business, three statementsStarting from net income and adjusting for noncash items and working-capital timing to reach cash from operations.
A rise in receivables is subtracted: revenue was counted that has not been collected yet.
Unit 11: Find the cash inside the profitAn identifiable asset with no physical form, such as a patent, a license or a customer list, recognized when the criteria are met.
An acquired patent is a separate asset. Goodwill is what is left after it has been counted.
Unit 08: The assets you cannot touchAn earnings measure, often EBIT, divided by interest expense: how many times the earnings cover the interest bill.
It says nothing about principal repayments falling due.
Unit 09: Borrowed money has a priceGoods held for sale, or materials held for production, sitting as an asset until they are sold.
The cost moves to cost of goods sold at the sale; a write-down moves it sooner.
Unit 06: The cost of making a saleInternal rate of return: the discount rate at which a project's net present value is zero.
Cash flows that change sign twice can have two IRRs, or none.
Unit 20: Value is a claim on the futureThe dated record of one transaction, with debits and credits that add up to the same total.
Borrowing $10,000: debit cash 10,000, credit loan payable 10,000.
Unit 02: Every transaction has two sidesThe present value of the payments still owed under a lease, recognized as a claim on the Snapshot.
Five years of rent, discounted, becomes a liability on day one.
Unit 09: Borrowed money has a priceUsing debt, or fixed costs, to amplify the outcome for the owners. It magnifies gains and losses alike.
Debt raises return on equity in good years and deepens the loss in bad ones.
Unit 17: From numbers to diagnosisAn obligation to hand over cash, goods or services to someone else. A claim on the Snapshot.
A customer's advance payment is a liability until the service is delivered.
Unit 02: Every transaction has two sidesLast-in, first-out: the newest inventory costs go to cost of goods sold first.
Allowed under US GAAP, banned under IFRS.
Unit 06: The cost of making a saleHaving the cash to pay what is due when it is due.
A profitable business can still miss a loan repayment on the day it matures.
Unit 09: Borrowed money has a priceLast twelve months, or trailing twelve months: a moving one-year window that ends at the latest quarter.
Prior full year − the old half year + the new half year.
Unit 16: Compare like with likeCustomer lifetime value: the contribution a customer is expected to bring over the relationship, under stated churn, cost and discount assumptions.
It is a forecast of future economics, not cash already collected.
Unit 18: What makes growth profitable?Share price multiplied by the shares outstanding: the market's price for the owners' claim.
It is an equity value. Add net debt to get to enterprise value.
Unit 10: Who owns the earnings?Price minus cost, divided by cost.
A 25% markup on a $100 part gives a $125 price and a 20% margin.
Unit 01: The language of a businessWhether an omission or error is big enough, in amount or in nature, to change a reader's decision.
No fixed percentage makes a deliberate small error acceptable.
Unit 02: Every transaction has two sidesManagement's discussion and analysis: the section of a filing where management explains the results in its own words.
Keep management's explanation separate from what the statements independently establish.
Unit 15: Read a public companyDebt minus the cash that a stated definition treats as available to repay it.
Cash the operations need to run is not excess cash.
Unit 20: Value is a claim on the futureThe bottom line of the Scorecard: what is left after every expense, gain, loss and tax for the period.
It is not cash generated, and after preferred dividends it is not all available to common shareholders.
Unit 04: One business, three statementsA number that adjusts or departs from the nearest GAAP measure, as defined by the SEC's rules for filings.
A transparent reconciliation does not make an exclusion fair.
Unit 12: EBIT, EBITDA and what gets left outThe share of a consolidated subsidiary that belongs to outside owners rather than the parent.
The group reports 100% of the subsidiary's revenue, then shows the outside owners' share of profit separately.
Unit 21: When businesses combineNet operating profit after tax: operating profit with a normalized tax charge and no financing effects. The numerator for ROIC.
Operating profit 100 at a 25% tax rate gives NOPAT of 75.
Unit 17: From numbers to diagnosisNet present value: the present value of the cash coming in minus the present value of the cash going out, at the required return.
Accounting profit can be positive while the project's NPV is negative.
Unit 20: Value is a claim on the futureOther comprehensive income: specific gains and losses the rules route around net income and straight into equity, such as some currency and investment movements.
The standards decide what goes here. It is not a choice.
Unit 10: Who owns the earnings?The Scorecard subtotal after operating costs and before interest, nonoperating items and tax, as the company presents it.
It is a GAAP subtotal. EBITDA is an analyst's construction, and the two are not the same number.
Unit 12: EBIT, EBITDA and what gets left outHow sharply operating profit responds to a change in sales when fixed costs are large.
Near break-even, a small sales change produces a huge percentage swing in profit.
Unit 18: What makes growth profitable?Operating expenses. Which costs are inside depends on the company and the presentation.
Check whether cost of sales and depreciation are included before building a profit bridge.
Unit 12: EBIT, EBITDA and what gets left outWhat the next-best use of the same resource would have earned.
A cheap order that fills the last machine slot displaces the better order that would have used it.
Unit 18: What makes growth profitable?Price to earnings: the share price divided by earnings per share, or equity value divided by net income.
It stops meaning anything when earnings are near zero or negative.
Unit 20: Value is a claim on the futureA promise in a customer contract to deliver a distinct good or service. Revenue is recognized as each one is satisfied.
A device sold with a year of support is two obligations, and the price is split between them.
Unit 05: When does a sale become revenue?A gap between book income and taxable income that never reverses, such as an expense the tax law never allows.
A nondeductible fine raises the effective tax rate and creates no deferred tax asset.
Unit 13: One business, two rulebooksProperty, plant and equipment: the tangible long-lived assets the business operates with.
Closing PP&E = opening PP&E + capex − depreciation − disposals.
Unit 07: Pay now, use for yearsCash paid before the benefit is used, held as an asset until it is consumed.
A year of insurance paid in January becomes expense one month at a time.
Unit 03: Cash runs on a different clockWhat a future amount is worth today, after discounting for time and risk at a stated rate.
$121 in two years at 10% is worth $100 today.
Unit 20: Value is a claim on the futureThe amount borrowed on a loan, or, in revenue accounting, the business that controls the goods before the customer gets them.
Repaying loan principal reduces debt, not profit. A revenue principal reports the gross sale.
Unit 09: Borrowed money has a priceA presentation of results as if a transaction had already happened. In a filing it follows defined rules; elsewhere it is whatever the presenter chose.
It is not a polite word for optimistic adjusted earnings.
Unit 22: Take a business apartMeasuring every acquired asset and liability at fair value before the leftover is called goodwill.
Miss the acquired technology and goodwill is overstated by its value.
Unit 21: When businesses combineHow well reported earnings describe the sustainable business and how much of them turns into cash.
Normalize symmetrically, and keep the cash effect of every cost you exclude.
Unit 23: Ask whether the earnings hold upResearch and development: the spending and the rules for it.
US GAAP generally expenses it, with exceptions; IFRS capitalizes development that meets its tests.
Unit 08: The assets you cannot touchA customer's unpaid invoice: an unconditional right to be paid, with only time in the way.
Collecting it swaps a receivable for cash. The revenue was counted when the work was done.
Unit 03: Cash runs on a different clockA step-by-step bridge showing why two records or two measures differ.
A bank reconciliation checks the ledger's cash against the bank's own statement.
Unit 02: Every transaction has two sidesWhat an asset is expected to be worth at the end of its useful life.
Subtract it from cost before spreading the rest over the years.
Unit 07: Pay now, use for yearsThe profits kept in the business over its life, after dividends. An equity balance, not a bank account.
Retained earnings of $38,500 do not mean $38,500 of cash is available to pay out.
Unit 04: One business, three statementsWhat the business earned from customers in the period, recognized when the work was done under the applicable rules.
A customer's advance is not revenue until the service has been delivered.
Unit 05: When does a sale become revenue?The lessee's right to use a leased building or machine for the lease term, shown as an asset.
It is a right to use the building, not ownership of it.
Unit 09: Borrowed money has a priceReturn on equity: net income divided by average equity.
With tiny or negative book equity the percentage stops meaning anything.
Unit 17: From numbers to diagnosisReturn on invested capital: NOPAT divided by the average capital tied up in operations, under a consistent definition.
Say whether goodwill and leases are in the denominator.
Unit 17: From numbers to diagnosisSelling, general and administrative expenses: sales staff, finance, head office and the like.
A label for function, not for behavior; some of it is fixed and some of it moves with sales.
Unit 06: The cost of making a saleWhat a business will have to pay to run on its own, once the parent's shared services are gone.
They can be well above the allocation the parent used to charge.
Unit 22: Take a business apartA balance at one instant. Also, in another context, a share of a company.
Inventory on December 31 is a stock; the year's cost of goods sold is a flow.
Unit 01: The language of a businessPaying employees with shares or options. Noncash when it is expensed, still a real cost to the owners through dilution.
Adding it back to EBITDA does not make the employees free.
Unit 10: Who owns the earnings?Costs that stay with the parent after a division is sold, with no division left to carry them.
The allocation stops, but the lease and the staff do not.
Unit 22: Take a business apartMoney already spent that no future decision can recover.
Decide on the cash flows that still differ between the options, not on what is already gone.
Unit 18: What makes growth profitable?A benefit expected from combining two businesses that neither could earn alone.
Each one needs an action, an owner, a date and the cost of getting there.
Unit 21: When businesses combineThe value the tax law assigns to an asset or liability, used to work out future taxable gains and deductions.
Book carrying amount 70 and tax basis 50 give different gains on the same $90 sale.
Unit 13: One business, two rulebooksProfit as the tax rulebook measures it for the taxpayer and the year.
Not the same as pretax book income, and not the same as cash received.
Unit 13: One business, two rulebooksA gap between an item's book carrying amount and its tax basis that will reverse in a later period.
Different book and tax depreciation schedules open the gap and then close it.
Unit 14: Taxes across timeThe value assigned to every year after the explicit forecast, usually with a perpetual growth rate.
The formula only works when the discount rate is above the growth rate, and it often dominates the total.
Unit 20: Value is a claim on the futureA list of every account balance, used to check that total debits equal total credits.
It catches arithmetic. It does not catch a balanced entry that should never have been made.
Unit 02: Every transaction has two sidesTransitional services agreement: the parent keeps providing services such as IT or payroll to a separated business for a limited time.
Its price is a bridge, not the steady-state cost of independence.
Unit 22: Take a business apartThe cash the operations generate before any payments to lenders or owners: NOPAT + D&A − capex − the increase in operating working capital.
It belongs to all capital providers, which is why it is discounted at the WACC.
Unit 20: Value is a claim on the futureUnder US GAAP, the part of a deferred tax asset written down because it is not expected to be usable.
Releasing it lifts net income without a dollar of new operating cash.
Unit 14: Taxes across timeA cost that rises and falls with activity within the modeled range.
If the variable cost per unit is above the price, every extra sale loses money.
Unit 18: What makes growth profitable?Weighted-average cost of capital: the blended return lenders and owners require, weighted by how much of the financing each provides.
It matches unlevered cash flows. Cash after interest needs the equity rate instead.
Unit 20: Value is a claim on the futureShares outstanding weighted by how much of the period they were outstanding. The denominator for EPS.
Shares issued in July count for half the year, not the whole of it.
Unit 10: Who owns the earnings?Two meanings: current assets minus current liabilities, or the narrower operating investment in receivables plus inventory minus payables.
Operating working capital leaves cash and debt out; say which version you mean.
Unit 11: Find the cash inside the profitYear to date: everything from the start of the fiscal year up to a given date.
Subtract the first-quarter YTD from the second-quarter YTD to isolate the second quarter.
Unit 16: Compare like with like