Difference between FCF calculated from EBITDA and Net Income
Hi guys,
I'm having a little trouble figuring out why these 2 formulas might give different results:
To put in context, I was looking to analyze the impact of a PIK loan (let's say $100 PIK loan @ 10%). When I compute it with the 2nd formula (starting from Net income) it's fine, and the BS balances.
But when I start from EBITDA it does not work (as I'm not taking account of financial expenses incurred by the PIK loan).
Could someone clarify this for me and tell me what I have forgotten ?
Thanks a lot !
first one excludes interest tax shield
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