I'd like some thoughts to clarify a doubt that has been troubling me for the past few days. I've read many reputed sources that free cash flow can be computed as = Cash Flow from Operations + Interest Expense (1-tax rate) - Capital Expenditure. But many analysts ignore the interest component and calculate FCF as Cash Flow from Operations minus Capital Expenditure. Is it correct to add interest expense this way to estimate FCF? Specifically, what is the correct method when CFO is reported under US GAAP, where interest paid is included as an operating activity in the cash flow statement?
Trending Content - Equity Research Forum
Career Resources
Hey Nitin_CFA, I'm the WSO Monkey Bot...do any of these help:
More suggestions...
Fingers crossed that one of those helps you.
Totam sed eum deserunt aut repudiandae debitis commodi. Quibusdam incidunt corporis saepe molestiae. Est hic distinctio cumque et.
Nesciunt ipsum labore odio nostrum voluptatum. Voluptas perferendis illo nisi harum quas possimus. Aut sunt nemo consectetur sapiente commodi alias qui. Provident ducimus architecto consequatur deleniti consectetur qui possimus. Neque nulla beatae fugit.
Et id impedit aperiam qui qui. Odit minus ut numquam magnam facilis libero. Accusamus sapiente velit dolorem excepturi animi. Iste nihil sunt error quas iusto quia asperiores. Voluptates minima occaecati beatae quae qui. Aut deserunt modi fuga adipisci molestiae qui.
Sit sint fuga omnis sapiente quo non. Sit sed exercitationem omnis sed. Provident minus et quas aliquid qui sit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...