Valuation question - Equity research report
I was reviewing the model of a gaming company prepared by the equity analyst of a top bank. When calculating Free Cash Flow, I noticed that they added back taxes after having substracted it in Cash flow from operating activities.
Perhaps easier sharing their formula >> FCF = Cash flow from operating activities - Capex + Add-back of taxes.
Perhaps a dumb question, but I can't figure out why you would add back a true cash outflow like taxes. Any help?
Thanks a lot.
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