Depreciation in the FCFF DCF model
Hi all,
I'm trying to calculate FCFF for a company for a DCF and depreciation ends up making up a massive proportion of the FCFF (~60-75%), overriding any effects of the net income projections on the projected price. How should I interpret these results and are there any red flags I should be looking out for?
First off, what has Depreciation been historically? Do your projections align with this at all? Additionally, do you have large CapEx figures to support these large depreciation figures?
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