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Key point with defensive income statement/free cash flow is this: increases in working capital, fixed capital and other long-term assets are expenses because they are (1) uses of cash and (2) you never know whether these outlays will generate higher future revenue, production economies, etc. Better to err on the side of caution.

Also, many companies will provide more detail of "other current assets" and "other current liabilities" in the footnotes."


Haven't had my caffeine fix yet, so not thinking straight. Does this mean "Yes - include," or "Yes - exclude?"

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