Financial analysis : Question 12
Should working capital for the year or change in working capital be taken into consideration in the cash flow cascade?

Working capital is a sum of outstanding items on the balance sheet, while change in working capital is a flow of entries and exits (inventories sold, new inventories of finished goods, payments made, etc.) and accordingly, only change in working capital should be taken into account in the cash flow cascade.

For more information, see chapter 5 of the Vernimmen.