Another FCF question

I’ve seen FCF calculated in the following ways in commercial underwriting:

FCF=EBITDA - cash taxes - cashu interest - change in WC - CAPEX

FCF=CFO - CAPEX - dividends

how would you determine which to use?

6 Comments
 
  1. Is correct for FCFE, however FCF gives you the cashflow from assets, so you should not deduct interests to find FCF.
  1. FCO is just EBITDA - change WC - Cash Tax. So it correct to just subtract Capex to find FCF. However you should not subtract dividends for the same reason as explained in 1.
 
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