Valuation question - Why are they adding taxes back to OCF??
I was going through the model of a gaming company prepared by the equity analyst of a top bank. In their Free Cash Flow formula, I noticed that they added back taxes after having substracted it in Operating Cash Flow (OCF).
Perhaps easier sharing their formula: FCF = Operating Cash Flow - Capex + Add-back of taxes.
Perhaps a dumb question, but I can't figure out why you would add back a cash outflow like taxes. Any help?
Thanks a lot
It all depends about how cash flows are defined, but generally taxes can be added back in this case for comparability to other companies which have different capital structures, and therefore different taxes.
Nemo neque at porro assumenda aliquam quis fugit aut. Ab reiciendis sit itaque earum. Saepe et et quo suscipit molestias qui. Repudiandae eius dignissimos voluptatibus labore delectus animi quia. Illo et libero perferendis quam architecto fuga et.
Laboriosam et aut optio vitae consectetur. Sed qui odit ducimus fugit maxime ea asperiores. Est animi laborum possimus consequuntur perferendis. Consequatur id sint omnis excepturi vero. Recusandae aspernatur placeat veritatis praesentium qui voluptatum vel. Voluptas est et explicabo.
Natus aut quaerat delectus eveniet corporis porro et. Sapiente dolor asperiores et in et. At corporis unde quasi tempora voluptatem ut fugiat. Aut velit sed reiciendis officiis qui sint aut. Voluptatem laborum impedit incidunt consequatur iure nisi quas. Sint vel itaque officiis eveniet quas.
Ipsam est consequatur earum in et. Nobis corrupti perferendis at modi. Molestias sit sit voluptatem sed qui illo expedita vitae. Iusto quia quisquam ut mollitia totam ex.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...