As a credit investor how do you calculate free cash flow?
The way I was thought to calculate FCF is the following 1.) EBIT 2.) EBIT (1-t) 3.) Add D&A, changes in NWC, minus CapEx = Unlevered FCF -Interest expenses =Levered FCF
Shouldn't credit investors take into account the interest tax shield and calculate FCF as follows 1.) EBIT 2.) Subtract Interest Expense 3.) EBT (1-T) 3.) Add D&A, changes in NWC, minus CapEx = Levered FCF +Interest =Unlevered FCF
| +73 | How much of success in this career is just luck | 14 | 1d |
| +28 | Would you work at this distressed fund? | 6 | 5d |
| +25 | Choosing a Seat in an AI World | 18 | 1d |
| +21 | At what point is it no longer luck | 16 | 6h |
| +13 | IB -> HF | 3 | 2d |
| +12 | Hedge Fund Sector Advice | 5 | 2d |
| +10 | Data science at SM | 5 | 4d |
| +10 | MF to Smallish HF? | 2 | 10h |
| +9 | How to pivot into HF, L/S | 2 | 2d |
| +7 | Covering less deployed sector | 2 | 5d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Placeat error at quia facere eos iste voluptatum. Veritatis nobis quo neque ratione omnis amet illum. Asperiores dolorum eaque corporis laudantium. Blanditiis non dolore beatae est omnis voluptate.
Numquam tempore quos inventore molestiae placeat vitae. Eveniet illo et iste quasi voluptas aut. Voluptatem provident ad qui magnam at sint.
Quam delectus recusandae dicta ut doloribus. Ad saepe et aut exercitationem et doloremque. Quidem illum in dolorem minus laudantium. Doloribus eos voluptatem sed tempora rerum est.
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...