UFCF Technical Question
I'm refining and practicing some technical questions, and I have a question for you guys on two different UFCF equations. I know I'm splitting hairs for the most part, but I'm just curious on how the latter equation would be perceived in an interview.
1. The typical WSO/Vault/IB-Guide would probably state UFCF as: EBIT(1-T) + D&A - ΔNWC - CapEx
2. The alternate way is: EBIAT - ΔNet Invested Capital
-With this explanation D&A, CapEx, and NWC are contained w/ in the ΔNet Invested Capital
-Invested Capital also allows for additional adjustments for Op. Leases, Goodwill & Acquired Intangibles, Other Op. Assets (net of Op. Liabilities) , etc.
The only advantage to the second definition is that it packages adjustments in a little bit a 'neater' way, but does anyone really even give a shit? Since I'm asking, I think I know the answer... but any thoughts?
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