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  2. What do you do with the principle part of an amortizing bond when calculating levered free cash flow? I have heard/read about two aspects of levered free cash flow. The first is that it is cash flow available to equity holders. The second is that it is un ...

    32 comments21 May 2020 -

  3. Moderator note (Andy): this is a post from 2010 but squawkbox suggested its relevancy remains and can be very useful for those going through FT & SA interviews. "Don't beat it to hell because it's missing some small details, but it' ...

    69 comments13 Feb 2018 -

  4. Calculating FCF question

    Investment Banking

    Which equation do you guys use and why? FCF = net income + amort/deprec- changes in working cap- cap ex or FCF = cash from operating- cap ex I know the two are theoretically equivalent. The internet has led me to believe that the first is old school, and ...

    84 comments21 Jan 2011 -

  5. In Joshua Rosenbaum 's Investment Banking, free cash flow is calculated as: EBIT(1-t) + D&A- Capex- Increase/(Decrease) in NWC. Most sources present the formula for free cash flow this way, without any mention of stock based compensation. However ...

    22 comments20 Jul 2017 -

  6. I'm building a DCF model. How do I calculate tax expense when Operating Income (EBIT) is negative to get to FCFs? Net Operating Loss Carry Forward dosk17- Retired Investment Banker: Basically here is what you do: As the posters said above, if you hav ...

    13 comments22 Dec 2017 -

  7. Why does everyone look at free cash flow when the common formula (Total Cash Flow From Operating Activities- Capital Expenditures) does not take into account things like interest expense (or any taxes or debt payments at all?) Basically- who cares about a ...

    10 comments7 Apr 2017 -

  8. Hi everyone. I have a question and thank you for your answer in advance. I have to calculate the debt service (to calculate debt service coverage and so forth) but I am not sure whether it includes the current portion of long term debt. I consider current ...

    10 comments12 Nov 2014 -

  9. Guys, a quick question. I am doing a DCF for a utility power company and right now it has positive EBITDA but negative FCF due to very high Capex. Obviously I am assuming that it will generate positive FCF in the future(in line with equity research report ...

    8 comments9 Jan 2018 -

  10. For one company I did both methods and arrived to substantially different numbers. My calculations are wrong or these two methods are designed to be different? Thx free cash flow ...

    8 comments1 Jul 2013 -

  11. I am currently building a model for a firm that grows at a constant rate for 5 tears, then after that, is expected to grow at 1% for infinity. how do i model the sales and FCF for that? Also, when building a model, does PPE grow at the same rate as sales? ...

    7 comments15 Nov 2012 -

  12. Hi guys, just want to make sure a few facts straight here, 1, FCFF(Free Cash Flow to Firm) also called Unlevered FCF, FCFE(free cash flow to Equity) also called Levered FCF? 2, FCFF discounted by WACC (cost of equity is calculated using unlevered Beta)=En ...

    6 comments31 Jul 2012 -

  13. So free cash flow to equity is typically just cash flow from ops less capex (I guess some people include debt issued and repaid here as well), and free cash flow to the firm excludes interest expense but is similar. Let's say a company issued either ...

    6 comments26 May 2010 -

  14. Free Cash Flow and CAPEX

    Investment Banking

    Hi! I'm working currently on my bachelor thesis about valuation using a DCF model. In this model the FCF is calculated according to the following procedure: EBIT- Adjusted taxes =NOPLAT + D&A- CAPEX-Changes in NWC =FCF Concerning the CAPEX: The c ...

    5 comments19 Sep 2012 -

  15. Hi all, hoping you can help clarify something I've been stuck on: Is there a reason that when building to levered free cash flow starting from EBITDA we wouldn't use the after-tax interest expense? I'm looking at a previous version of a pag ...

    2 comments25 Mar 2020 - Prospect in 

  16. Free Cash Flow Iteration

    Private Equity

    To qualify this post I have about 6 months of LBO modeling experience. As a general rule, I calculate FCF for debt paydown as: FCFDP = NI + Depreciation + Amortization- Capex +/- Change in NWC I am aware there are multiple ways to think about arriving at ...

    2 comments23 Feb 2018 -

  17. What's up all? I'd love any insights you can provide into the following questions... Would anybody be able to help me draw the realtionship between these two metrics? Can earnings yield proxy FCF yield? Which metric do you prefer...? Obviously t ...

    2 comments31 Jul 2012 -

  18. Need help with valuation of Company XYZ free cash flow free cash flow ...

    2 comments31 Jul 2012 -

  19. Free cash flow is a measure of how much money is available to investors through the operations of the business after accounting for expenses of the business such as taxes, operational expenses and capital expenditures. Free cash flow comes in 2 forms, lev ...

    30 Apr 2018 -

  20. Can someone please help me on how to value the equity of consolidated company (Parent) who has two investments in associate (Ownership ratio: 25% and 40%, respectively) whose business is core of the parent. these associate companies are accounted under eq ...

    5 Mar 2016 -

  21. I have built an integrated operating model and am coming across a problem. Can you discount Unlevered Free Cash Flow directly from the cash flow statement? When I calculate Unlevered Free Cash Flow from EBIT, I am getting a different result than what is o ...

    1 comment2 Feb 2016 -

  22. Hi WSO, I'm currently having to "reformulate" my financial statements (Anyone who has come across Penman's Financial Statement Analysis will understand) for Whitbread plc and one of my tasks is to rearrange the cash flow statement. I&# ...

    1 comment3 Jan 2015 -

  23. FCF model suitability

    Investment Banking

    Hey guys, I just wondering the suitability of free cash flow model for a corporation with a lot of investment in associates and joint ventures. As we all know, the FCF starts from EBIT which does not include the shared profit from associate and JV. Howeve ...

    1 comment28 May 2011 -

  24. Not a business student here and just trying to learn the DCF technique through online sources. So my question is, how do I project free cash flow for 5-10 years out for a firm. The source that I have been looking at states that you must look at the firms ...

    1 comment20 Aug 2009 -