Calculating FCF - when is it appropriate to not include taxes in the calculation?

If an LLC has no income tax expense in their filings - they go right to net income after accounting for interest expense - do you exclude the EBIT*(1-t) calc when getting to FCF? In other words, can I take EBIT and omit multiplying it by (1-t), then continue on with the other adjustments? Thanks in advance.

Comments (2)

Oct 26, 2019

Is it a situation where a parent co pays tax?

Apply tax based on the go forward capital structure / legal structure (e.g. if considering takeover where you would have to pay tax, put tax in).

Need more info on specific reason they aren't paying tax now to comment further

Hope that helps

Oct 29, 2019
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