Operating working capital includes operating current assets and operating current liabilities Because taxes payable are usually current liabilities, this means they're often a part of operation working capital But beware, there are many types of taxes in the financial statements and we need to make sure we get the right figure to include Examples of the types of taxes that we can find in financial statements include Tax expense on the income statement Taxes payable on the balance sheet and tax paid in the cash flow statement, which one do we want? Well all three, tax expense, tax liability and tax paid are connected But they're often different figures We can use "BASE" analysis which stands for beginning, add, subtract, end to calculate the ending value So my beginning tax payable from the balance sheet, that goes up when we add on tax expense But it then goes down We subtract tax paid and that then gets to our ending, taxes payable BASE analysis is really useful for forecasting balance sheet figures into the future But we never use it into the past! But if you're calculating operating working capital, it's the balance sheet figure that you want The taxes payable, that goes into operating working capital