Free Cash Flow
Its the cash available for a company to distribute to the creditors and share holders, thus the term free cash flow
Calculating Free Cash Flows - Asset Perspective
Free Cash Flows = After Tax Operating Income - Investments in Assets
Where,
Investments in Assets = Change in Net Working Capital + Change in the Gross Fixed Assets
Change in Net Working Capital = Change in CA - Change in CL ( Non - interest Bearing )
Calculating Free Cash Flows - Financing Perspective
Sum of all the below items
- Interest Paid to the Creditors
- Dividend Paid for Share holders
- Increase / Decrease in the Outstanding Debt
- Issue or repurchase of Stock
0 comments:
Post a Comment