No, short-term debt should not be included in working capital when estimating cash flows in a DCF valuation. Shor- term debt is an interest-bearing liability and so should be considered as debt. Only non-interest-bearing liabilities such as accounts payables, supplier credit, accrued expenses such as rent, salaries, etc. should be part of current liabilities. This page answers this question: What types of liabilities are considered as part of current liabilities when computing working capital?
Working capital is an essential part of cash flows. So it plays an important part in the estimation of cash flows. It’s impact on valuation is quite significant in many situations.
This page discusses this question: Is short term debt showing up as part of current liabilities included in working capital when estimating cash flows in a DCF valuation?
Taxes and tax rates are important to understand when you do DCF valuation. Taxes and tax rates impact your net income, cash flows, capital structure, cost of capital and therefore valuation. Tax rates are applied to operating profits before taxes in your DCF model. But what happens if you do not have any operating profits!?
This page addresses the question: What tax rate would you use if your company currently has operating losses.
Countries operate in multiple countries and every country and state that a company is domiciled in has a tax rates prescribed by law. There is no one size fits all tax rate that is best when valuing a company using the DCF valuation approach. Multiple tax rates apply to a company. Federal /state statutory tax rates, Effective tax rates, marginal tax rates, etc.
This page addresses the question: What tax rate would you use if your cash flows are international and have different tax rates in different jurisdictions?