How do you treat net change in working capital in the free cash flow calculation for a business which trades in commodities plus some other operational line of business.

Do you treat the trading based net change as cash and not include it since it can be financed. Or do you include it in calculating free cash flow

Question

How do you treat net change in working capital in the free cash flow calculation for a business which trades in commodities plus some other operational line of business.  

Do you treat the trading based net change as cash and not include it since it can be financed. Or do you include it in calculating free cash flow

anonymous · Answer

You can use FCFE instead which incorporates the effect of financing through debt