Hi guys, I'm working on a DCF at the moment (interning in a small-cap PE, though not relevant) and I have a few questions. Sorry if this is the wrong place to post but hopefully I can get some insights! I'm relatively proficient at creating a DCF model, but past experiences have been self-initiated or school-based so I'm not certain about some real-world areas.
- When using FCFF, should exceptional income/expense and financial income/expense be factored into the cash flows used in the DCF?
- Same question but with Sales & Leaseback, Investment in affiliates, payment of payables etc.
I'm working with the formula: FCFF = NOPAT + depreciation - Capex - Change in NWC, but the associate is questioning me on whether the above items should be included in the cash flow and why. Some insights would be very much appreciated! Thank you!
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